Crude Oil Trades Below $78 After Declining on Recovery Concerns

Nov. 20 (Bloomberg) -- Crude oil traded below $78 a barrel in New York after falling yesterday as the dollar strengthened and amid concerns about the pace of recovery in the U.S., the world’s biggest energy consumer.

Oil dropped for the first time in four days as U.S. stocks extended a global drop amid concern that the rally has outpaced the prospects for economic growth. Prices also declined as the dollar advanced against the euro, reducing the appeal of commodities as an alternative investment.

“Crude is just looking for a reason to go down,” said Carl Larry, president of Oil Outlooks & Opinions LLC, a Houston-based energy adviser. “Right now equities are falling and crude is falling with it. You get the herd mentality and everyone wants to sell.”

Crude oil for December delivery traded at $77.78 a barrel, up 32 cents in electronic trading on the New York Mercantile Exchange at 10:34 a.m. Sydney time. Yesterday, the contract fell $2.12, or 2.7 percent, to $77.46, the biggest decline since Nov. 12.

Futures have climbed 74 percent this year and are poised for a gain of 1.9 percent for the week.

The Standard & Poor’s 500 Index fell 1.3 percent to 1,094.90 in New York yesterday. The Dow Jones Industrial Average lost 0.9 percent to 10,332.44. The dollar traded at $1.4914 against the euro at 10:39 a.m. Sydney time, from $1.4925 yesterday.

OPEC Shipments

Nigerian Oil Minister Rilwanu Lukman said he doubted the Organization of Petroleum Exporting Countries would cut supply with prices at current levels. OPEC members generally prefer to have higher quotas, he told reporters in London yesterday. OPEC plans to meet in Angola in December to discuss production.

OPEC shipments are expected to remain steady in the four weeks ending Dec. 5, according to tanker tracker Oil Movements. Members will ship 22.78 million barrels a day in that period, in line with an average of 22.73 million barrels in the month to Nov. 7, Halifax, England-based Oil Movements said yesterday.

Brent crude for January settlement declined $1.83, or 2.3 percent, to end the session at $77.64 a barrel on the London- based ICE Futures Europe exchange yesterday.