Crude Oil Trades Near $72 After Dollar Weakens, Equities Rise

Sept. 23 (Bloomberg) -- Crude oil traded near $72 a barrel in New York after rising yesterday as the dollar declined and U.S. stocks advanced on signs the world economy is improving.

Oil climbed 2.6 percent yesterday, the first gain in four days, as the dollar slipped to $1.4821 per euro, its lowest in a year. A weaker dollar bolsters the appeal of oil and other commodities as a hedge against inflation.

“Oil rallied above $70 fueled by the falling dollar and higher equities markets,” said Mike Sander, an investment adviser at Sander Capital in Seattle. “With the dollar losing value day by day other assets such as oil, gold, and equities become more attractive boosting their value.”

Crude oil for November delivery traded at $71.73 a barrel, down 3 cents, in after-hours electronic trading on the New York Mercantile Exchange at 9:21 a.m. in Sydney. Prices have gained 61 percent since the start of the year.

The Standard & Poor’s 500 Index rose 0.7 percent to 1,071.66 in New York yesterday. The Dow Jones Industrial Average gained 51.01 points, or 0.5 percent, to 9,829.87. The dollar traded at $1.4789 per euro at 6:04 a.m. in Tokyo.

The U.S. Energy Department may report today that crude oil supplies declined for a fourth week, according to analysts surveyed by Bloomberg News. Stockpiles fell 1.4 million barrels in the week ended Sept. 18, from 332.8 million, according to the median of 17 forecasts.

Industry Report

The industry-funded American Petroleum Institute said yesterday that U.S. crude stockpiles rose 276,000 barrels to 337.2 million last week. Gasoline supplies increased 3.82 million barrels, the report showed.

The Energy Department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. in Washington. The industry-funded API put out its own data at 4:30 p.m. yesterday.

The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.

Brent crude for November settlement rose $1.84, or 2.7 percent, to end the session at $70.53 a barrel on the London- based ICE Futures Europe exchange yesterday.

Dollar Declines to One-Year Low Versus Euro Before Fed Decision

Sept. 23 (Bloomberg) -- The dollar declined to a one-year low against the euro on speculation Federal Reserve policy makers will signal today this will keep interest rates low, diminishing the allure of U.S. assets.

The greenback fell versus 13 of its 16 major counterparts after a government report showed New Zealand’s economy unexpectedly expanded for the first time in six quarters, spurring investors to buy higher-yielding assets. The U.S. dollar also declined on concern Group of 20 leaders, meeting in Pittsburgh starting tomorrow, will call for a reduction in global trade imbalances that may cause further gains in the dollar’s counterparts.

“Our view is that the Fed won’t change its statement, so we’d be very surprised if they changed the reference to exceptionally low levels of the fed funds rate,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “We are broadly bearish on the dollar. The improving global picture tends to produce selling of the dollar.”

The dollar fell to $1.4809 per euro as of 9:15 a.m. in Tokyo from $1.4790 in New York yesterday, after earlier declining to $1.4842, the lowest level since Sept. 22, 2008. The U.S. currency dropped to 1.0220 Swiss francs, after earlier reaching 1.0189 francs, the weakest since July 22, 2008.

The yen climbed to 90.77 per dollar from 91.10, and rose to 134.38 per euro from 134.76. The New Zealand dollar advanced 0.9 percent to 66.06 yen, after earlier rising to 66.27 yen, the highest level since Oct. 6, 2008.

The Dollar Index, which the ICE uses to track the dollar against the currencies of six major U.S. trading partners, dropped to as low as 75.939, the weakest since Sept. 22, 2008, before trading at 75.986 from 76.118 yesterday.