Latest Oil Prices Dip

Brent crude slipped toward $115 a barrel on Monday on concern about demand after disappointing jobs data from top consumer United States, but a softer dollar and political upheaval in the Middle East limited losses.

The possibility that OPEC will raise supply when ministers meet this week also put pressure on prices. Gulf Arab members led by Saudi Arabia will push for a rise, but were likely to face opposition from OPEC's leading hawks Iran and Venezuela.

"Today there is no shortage of supply. OPEC will do its job," the chief executive of the French energy giant Total (TOTF.PA) said at a conference in Kuala Lumpur.

Brent crude fell 33 cents to $115.51 a barrel by 0340 GMT, after settling up 30 cents on Friday. U.S. crude slipped 8 cents to $100.13 a barrel.

"We are going to have sideways trade, basically because the weaker economy means weaker crude oil prices because of less demand in the U.S., but we have Yemen that's going to keep it high (along with) the weaker dollar," Tony Nunan, a risk manager with Tokyo-based Mitsubishi Corp, said.

U.S. data showed payrolls rose by 54,000 in May, the softest reading since September, and the country's jobless rate rose to 9.1 percent in May from 9 percent in April.

Falling oil demand and higher supplies in the world's largest economy are pushing prices lower, analysts said. U.S. crude oil stocks rose in the week to May 27 to their highest seasonal level for May since 1990.

TransCanada Corp's (TRP.TO) 591,000 barrel-per-day (bpd) capacity Keystone pipeline -- which carries oil from Alberta to the U.S. oil hub of Cushing -- resumed shipping crude oil, one week after being shut by a leak at a Kansas pumping station, the Calgary-based company said in a statement.

Technical charts indicated that oil prices may drop in the short term, with Brent expected to slip to $112 per barrel and U.S. oil expected to revisit the Friday low of $98.12 per barrel.

The dollar .DXY slid to a fresh one-month low against a basket of major currencies early in Asia on Monday, as the jobs data bolstered expectations that U.S. interest rates will stay low for longer.

"The value of the dollar and the way it's declining is keeping some of these commodities at levels which are not sustainable," Jonathan Barratt, managing director of Commodity Broking Services in Sydney, said.

MIDDLE EAST SUPPORTS

Violence in the Middle East underpinned prices due to worries that instability could spill over to some of the world's largest oil and gas producers and disrupt global supplies.

Yemeni President Ali Abdullah Saleh was recovering from an operation in Saudi Arabia to remove shrapnel from his chest while a truce between his troops and a tribal federation appeared to be holding.

Protesters, interpreting Saleh's absence as a sign that his grip on power was weakening, celebrated on the streets of Sanaa where they have been staging anti-government demonstrations since January.

Syrian forces shot dead 31 people in the last 48 hours during demonstrations in a northwestern town and official media said gunmen killed four policemen in the same town.

Protests against Syria's President Bashar al-Assad have grown despite reform gestures dismissed by the opposition and a continuing crackdown that has killed at least 1,100 people since the uprising erupted two months ago.

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Oil slumps on weak jobs data, IEA output call

(Reuters) - Oil prices fell more than $1 on Thursday as weak U.S. economic data stoked worries about demand, and the International Energy Agency suggested members could release emergency stocks if OPEC failed to act.

The pull-back coincided with a broad decline across commodity markets, which are testing price floors following several weeks of volatile trade.

Oil volume was light at a quarter less than the 30-day average, suggesting many traders remained on the sidelines. The oil volatility index .OVX dipped to its lowest since May 5 as demand for options protection ebbed.

U.S. crude for June delivery settled $1.66 lower at $98.44, a day after rebounding when some buyers scooped up bargains. Prices touched a session high of $100.79, trading in a narrow range of between $96 to $101 for a sixth day.

"Some of the new longs that came into the market after the recent fall of about $20 a barrel are selling as the U.S. economic data this morning wasn't supportive," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut.

"The recent buyers pushed prices back to over $100, but they were disappointed with the data on weekly jobless claims and regional manufacturing and are bailing out," he added.

In London, ICE Brent for July delivery settled down 88 cents at $111.42, off the early session high of $113.04.

U.S. data showed weekly jobless benefit filings fell last week, yet claims remained above 400,000 for the sixth straight week, sparking labor market concerns.

Other data showed sales of previously owned U.S. homes fell in April while factory activity in the U.S. mid-Atlantic region grew much more slowly than expected this month, raising more concerns about economic growth.

Still, with unemployment down from a year ago there was some evidence that U.S. drivers were taking near-record $4 gasoline prices in stride.

Americans will cut other expenses rather than forsake highway holidays this Memorial Day weekend, travel group AAA said on Thursday, forecasting that the number of people hitting the road would be little changed from 2010.

The 19-commodity Reuters-Jefferies CRB index .CRB, a global benchmark for commodities, was down 1.4 percent, heading for its largest loss in a week.

IEA URGES PRODUCERS TO PUMP MORE

Concerned that high oil prices would dent the fragile global economic recovery, the Paris-based International Energy Agency urged oil producers to boost supply to cut fuel costs.

IEA, a watchdog for 28 industrialized nations, suggested its members could release emergency stockpiles if OPEC failed to act, although U.S. officials played down prospects for using the Strategic Petroleum Reserve to tamp down prices.

The IEA statement, issued after its governing board met, was an unusual comment on producer policies, analysts said. The statement came ahead of OPEC's next policy meeting on June 8.

The 12-member Organization of the Petroleum Exporting Countries maintains that world oil supplies are adequate.

"The IEA is part of the equation today. Investors have to be saying to themselves, 'hey, they could be serious about pulling the trigger on reserves'," said Richard Ilczyszyn, senior market strategist at Lind-Waldock in Chicago.

Also weighing on prices, UK consultancy Oil Movements forecast that seaborne oil exports from OPEC, excluding Angola and Ecuador, will rise by 420,000 barrels per day in the four weeks to June 4.

An unexpected drop in U.S. crude oil inventories last week and a large drop in stockpiles at the key Cushing, Oklahoma, delivery point for the U.S. oil futures contract further supported Wednesday's rally.

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Brent oil tops $120 a barrel on Libya unrest

NEW YORK—Oil prices surged to new heights Monday, with Brent crude topping $120 a barrel for the first time since August 22, 2008, as traders eyed a raging rebellion in oil-exporter Libya.

New York's main contract, light sweet crude for delivery in May, closed at $108.47 a barrel, a gain of 53 cents from Friday.

In London, Brent North Sea crude for May delivery leaped $2.36 to settle at $121.06, after topping at $121.29 just before the session close.

The market kept a focus on fighting that continued Monday in Libya between rebels and forces loyal to leader Moammar Gadhafi.

Rebel fighters made a new attempt to recapture Brega, advancing to the outskirts of the oil refinery town only to be forced back under artillery fire.

Before the crisis, Libya exported 1.3 million barrels a day of crude oil, more than 1.5 percent of global demand, in large part to Europe. Those exports have dwindled to a trickle amid the uprising.

That makes Brent crude futures, the European benchmark contract, more sensitive to the situation in Libya than the US market, where crude oil reserves are abundant.

"The longer these battles are going on, the more the market is realizing the supply is going to be offline," said Matt Smith of Summit Energy.

Unrest in other parts of the Arab world also contributed to the rise in oil prices, he said.

"Yemen is such a big threat at the moment because of the proximity" with Saudi Arabia, the biggest oil producer in the OPEC cartel, he said.

"Things in Bahrain have calmed down a little bit but any further unrest could press prices higher."

In Gabon, sub-Saharan Africa's fourth-largest oil producer, a strike by oil-sector employees had halted almost all oil production.

Gabon's oil daily output normally ranges from 220,000 to 240,000 barrels.

"It is not a lot of oil but given the current situation we can't afford any more outages, so all the barrels are important," Kilduff said.

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Crude continues decline despite signals from OPEC

Oil prices slumped Friday, despite signals from OPEC that it may slash production again, with the markets instead focused on the most recent reports showing drastic cutbacks in spending and consumption by businesses and consumers.

Gasoline prices again fell overnight, prompting one analyst to note a "half price holiday sale on gas" with Americans fueling up for the Thanksgiving holiday at half the price they did in July.

Light, sweet crude for December delivery fell $1.20 to settle at $57.04 a barrel on the New York Mercantile Exchange.

The Commerce Department Friday reported the largest ever October plunge for retail sales and a sharp drop in business inventories. It said retail sales fell by 2.8 percent last month, surpassing the old mark of a 2.65 percent drop in November 2001 in the wake of the terrorist attacks that year.

The decline in sales was led by a huge drop in auto purchases, but sales of all types of products from furniture to clothing fell as consumers retrenched.

That likely means fewer vehicle miles driven, both because of job losses and less trips to the shopping mall and less money spent on vacations. Businesses are slowing down as consumption drags.

The Commerce Department reported business inventories dropped by 0.2 percent in September. It was the first decline since March 2007 and the biggest drop in more than three years, since inventories fell by 0.3 percent in July 2005.

The national average price for regular gasoline fell overnight, down 2.6 cents to $2.152 a gallon, according to according to auto club AAA, the Oil Price Information Service and Wright Express. That is nearly $1 a gallon below what it was a month ago and nearly $2 below where it was in July when prices peaked at $4.11 per gallon.

"We're on a trajectory that cannot be turned around on the short term," Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service, said Friday of gasoline prices.

In his blog Thursday, Kloza estimated that the daily U.S. gasoline bill for the rest of November will be about $750 million per day less that what it was in early July when the cost was $1.55 billion per day.

He said some retailers have noted the actual purchase amounts of gasoline are smaller than what they were over the summer as motorists realize they will pay less for gas the next time they fill up.

He put the odds of oil dropping below $50 per barrel at about 50 percent even as the Organization of Petroleum Exporting Countries repeatedly removes oil from the market to keep pace with deteriorating demand.

An OPEC official said the 13-member states would meet in Cairo Nov. 29 on the sidelines of a previously planned meeting for Arab members of the group.

The official asked not to be named because the Vienna-based organization is not issuing a formal statement.

OPEC held an emergency meeting only three weeks ago and slashed production by 1.5 million barrels a day. Crude has tumbled 8 percent since then.

Analysts say OPEC's rhetoric rarely matches what it does.

Nevertheless, as the economy turns around, consumption of fuel will increase and send oil prices higher.

"In the long run global growth will be restored at some point," Kloza said Friday. "It will do their dirty work for them."

George Littell of Groppe, Long & Littell said OPEC's recent cuts will not be felt for a few more weeks. He noted that prices did not begin to fall this summer until Saudi Arabia ratcheted up production in July.

Littell said oil prices likely will start to rally in a few weeks once OPEC cuts start to hit and cold weather sets in across the country.

Jim Ritterbusch, president of energy consultants Ritterbusch and Associates, said OPEC needs to do something. If OPEC were to maintain production levels, oil consuming countries would be happy, but it probably would drag prices down another $5 or $10 a barrel, he said.

Oil prices have fallen about 60 percent during the last four months after reaching $147.27 in July.

OPEC, which produces about 40 percent of world supplies, has said it may cut production by the end of this month if prices continue to fall.

Before the 1.5 million barrel cut, OPEC said it was taking 520,000 barrels out of daily production. That too was brushed off by the market.

Meanwhile, the government said Friday that natural gas stockpile levels in the U.S. rose more than expected last week, but are 2 percent below the year-ago average.

The Energy Department's Energy Information Administration said in its weekly report that natural gas inventories held in underground storage in the lower 48 states rose by 62 billion cubic feet to about 3.47 trillion cubic feet for the week ended Nov. 7.

Analysts had expected a boost of between 41 billion to 46 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The news sent natural gas for December delivery down less than a penny to settle at $6.312 per 1,000 cubic feet on the New York Mercantile Exchange on Friday.

In other Nymex trading, heating oil futures fell 4 cents to $1.8351 a gallon, while gasoline prices dropped 6 cents to $1.24 a gallon.

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Oil prices hit record highs amid dollar weakness

NEW YORK (AFP) — World oil prices soared to new records Tuesday, breaching 98 dollars a barrel in New York, amid supply concerns and as the US dollar continued to weaken against other major currencies.

New York's main oil futures contract, light sweet crude for January delivery, soared 3.39 dollars to close at 98.03 dollars per barrel.

Prices in New York hit an all-time high of 98.62 dollars on November 7 during intraday trading, but Tuesday marked the first time prices had closed above 98 dollars.

In London, the price of Brent North Sea crude for January delivery surged 3.21 dollars to settle at 95.49 dollars per barrel, smashing a prior high of 95.19 dollars struck in November 7.

In after-hours trade, Brent crude was trading at even higher levels, at 96.24 dollars a barrel.

Some analysts believe oil prices could soon strike 100 dollars a barrel, especially as oil demand is being stoked by China and India's breakneck economic growth.

"Oil prices were higher today, with the dollar reaching fresh record lows against the euro and still coming off against other major currencies," Sucden analyst Michael Davies said.

The European single currency leapt to a historic peak above 1.48 dollars. The weakening dollar makes dollar-denominated commodities like oil cheaper for buyers armed with stronger currencies.

The market also continued to focus on the state of global energy supplies.

"Oil markets remain tight," analysts from the Commonwealth Bank of Australia said.

Despite supplies being strained ahead of the northern hemisphere winter, OPEC opted not to jack up its production quotas following a meeting in Saudi Arabia over the weekend.

The Organization of the Petroleum Exporting Countries (OPEC) has been under pressure, in particular from the United States, to boost supply to help cool prices.

However, OPEC's final declaration on Sunday after the meeting urged world peace to help stabilize prices and included a commitment to help fight global warming.

OPEC, which pumps 40 percent of global crude supplies, last decided to raise output in September when the oil producers' cartel agreed to provide an extra 500,000 barrels a day to the market, effective from November 1.

Some traders believe the ongoing weakness in the dollar will prompt OPEC to seek higher prices for oil, if not to move away from the currency all together.

"(OPEC) producers have seen their purchasing power decline with the dip in value of the greenback," said Bank of Ireland analyst Paul Harris.

OPEC has said it would hold off any discussion regarding production until its next meeting in December.

"The apparent removal of the possibility of increased supply will serve to at least underpin crude oil at these (price) levels," Harris said.

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Oil Rises More Than $1 on Signs OPEC's Lost Control of Prices

By Mark Shenk

Nov. 16 (Bloomberg) -- Crude oil rose more than $1 a barrel on speculation that the Organization of Petroleum Exporting Countries has lost control of prices.

``OPEC can't do anything about the price,'' Venezuela's oil minister Rafael Ramirez said today in Riyadh, Saudi Arabia, where OPEC is holding a heads-of-state summit this weekend. Oil prices could reach $100 a barrel ``soon,'' he said. The December futures contract in New York expired today.

``OPEC could make things worse with a constrictive output policy but they can't lower prices with additional output,'' said John Kilduff, vice president of risk management at MF Global Ltd. in New York. ``The expiration of the December contract is adding a lot of volatility to the market. Open interest is plunging so there's a lack of liquidity.''

Crude oil for December delivery rose $1.67, or 1.8 percent, to $95.10 a barrel at 2:51 p.m. on the New York Mercantile Exchange. The more-active January contract rose $1.77, or 1.9 percent, to close at $93.84 a barrel. Futures climbed to $98.62 on Nov. 7, the highest intraday price since trading began in 1983. Prices are up 69 percent from a year ago.

Prices dropped 1.3 percent this week, only the second weekly decline since August.

Brent crude oil for January settlement rose $1.39, or 1.5 percent, to close at $91.62 a barrel on the London-based ICE Futures Europe exchange. Brent reached $95.19 a barrel on Nov. 7, the highest since trading began in 1988.

Abu Dhabi Meeting

OPEC's next meeting on production policy will be held on Dec. 5 in Abu Dhabi. The group was founded in 1960, holds three- quarters of the world's oil reserves and accounts for more than 40 percent of current production.

``There was talk earlier that OPEC might increase production in Abu Dhabi,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``As the market went down the silence was deafening. If prices head back to the $97 to $98 level, we will probably start hearing about additional barrels coming on the market.''

Oil prices have increased more than 20 percent since Sept. 11, when OPEC decided to increase output by 500,000 barrels a day starting Nov. 1.

``This is a leadership meeting and there's no expectation that production policy will change,'' said Bill O'Grady, director of fundamental futures research at A.G. Edwards & Sons in St. Louis. ``This might have a bigger impact on the foreign exchange markets than on the oil market. There are a number of concerns about U.S. policy concerning the dollar.''

Falling Dollar

The U.S. dollar declined against the euro, enhancing the appeal of commodities as an investment. Commodities often move in the opposite direction of the U.S. currency. A lower dollar makes oil relatively cheaper in the countries using other currencies.

Saudi Arabia, the world's largest oil exporter, won't discuss pricing oil in currencies other than the U.S. dollar, Saudi Foreign Minister Prince Saud Al-Faisal said, speaking at a meeting of OPEC oil and finance ministers today. Venezuela and Iran have pushed for discussions on pricing oil in currencies other than the dollar.

``As for the monetary aspect and the dollar I would like to ask his Excellency, the minister of Iran, to leave this question to the appropriate party, the ministers of finance, without mentioning that we gave them this task so that there won't be negative impact from OPEC,'' Al-Faisal said today, speaking in reaction to an Iranian proposal to discuss the currency.

``I don't think the market needs more oil,'' Algerian Oil Minister Chakib Khelil told reporters in Riyadh. He voiced concern that the global economy is weakening because of the subprime mortgage crisis in the U.S., and this may be reducing demand for fuel. ``This month, there is lower demand in China, lower demand in the U.S,'' Khelil said.

U.S. Inventories

Prices fell yesterday after the Energy Department reported that U.S. crude-oil stockpiles climbed 2.81 million barrels last week, the first gain in four weeks. Analysts surveyed by Bloomberg expected the report to show a decline.

``This is the fourth week that prices have rallied on Friday,'' Barakat said. ``We also came off strongly yesterday, which may be in part responsible for the move today.''

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net .

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