Oil Rises More Than $6

Crude oil rose more than $6 a barrel as global stock indexes advanced and the dollar dropped against the euro, increasing the appeal of commodities.

Energy, metals and grain futures climbed as U.S. stocks gained in the biggest presidential election-day rally in 24 years after MasterCard Inc. and Archer Daniels Midland Co. reported better-than-estimated earnings. Oil also rose as the dollar's decline prompted investors to buy hard assets as an inflation hedge. An OPEC output cut started on Nov. 1.

Crude oil for December delivery rose $6.52, or 10 percent, to $70.43 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures climbed as much as $7.86 a barrel and are heading for the biggest one-day gain since Sept. 22. Prices, which have tumbled 52 percent since reaching a record $147.27 on July 11, are down 27 percent from a year ago.

The dollar fell the most against the euro since the 15- nation currency's 1999 debut. The dollar declined 2.6 percent to $1.2969 per euro, from $1.2643 yesterday.

The Reuters/Jefferies CRB Index of 19 raw materials climbed as much as 5.2 percent to 277.77 today, the highest since Oct. 22. The gauge lost 42 percent since reaching a record in July as the credit crunch choked worldwide growth.

Prices fell yesterday after data showed U.S. manufacturing shrank last month at the fastest pace in 26 years. Signs that the nation's economic slowdown will spread to emerging markets and curb fuel demand have sent oil prices lower.

Saudi Arabia has cut supplies to some customers ``significantly'' after last month's Organization of Petroleum Exporting Countries meeting, Reuters reported, citing people it didn't identify.

OPEC decided at a meeting in Vienna last month to cut the production target for 11 of the group's members by 1.5 million barrels a day, from 28.8 million barrels a day.

Algeria's energy ministry ordered state-owned oil company Sonatrach to lower output by 71,000 barrels a day, as of Nov. 1, state-run Algerian Press Service reported.

The United Arab Emirates, OPEC's fourth-largest oil producer, is implementing the supply cuts agreed on by the group and has informed consumers, Oil Minister Mohamed al-Hamli told reporters in Abu Dhabi yesterday. He declined to specify the size of the reduction.

Brent crude oil for December settlement increased $5.75, or 9.5 percent, to $66.23 a barrel on London's ICE Futures Europe exchange.

TradingEconomics.com, Bloomberg.com
11/4/2008 12:47:32 PM