Oil Slips On Dollar, Rate Fears After 2-day Gain; Brent Below $87
NEW YORK, Oct 30 (Reuters) - Oil prices closed down 1 percent on Thursday, resuming their downtrend after a two-day climb, as the dollar rallied on bets of a sooner-than-expected U.S. rate hike and traders placed little hope on OPEC cutting output at its November meeting.
Both benchmark Brent and U.S. crude gained about 1 percent a day earlier as U.S. crude stockpiles rose less than expected last week, ending two weeks of builds that pressured the market.
But sentiment in oil weakened again in the latest session as the dollar hit a three-week high after the Federal Reserve ended its long-running bond-buying stimulus on Wednesday. A stronger dollar makes commodities priced in the currency, including oil, costlier for buyers using other denomination.
A 3.5 percent annual rise in third-quarter U.S. gross domestic product reported on Thursday also reinforced investor confidence over the economy, lending to a more hawkish interest rate outlook.
"We're back to the mantra that the U.S. economy will lead the way to higher rates from hereon, and that's causing dollar to really weigh on oil and all commodities," said Phil Flynn, analyst at Price Futures Group in Chicago.
Brent crude for December delivery settled down 88 cents a barrel at $86.24, after falling to as low as $85.92. Front-month U.S. crude finished down $1.08 at $81.12, after a session low at $80.80.
Both crude grades briefly pared losses in late afternoon trade as stocks on Wall Street extended their gains.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.