Crude oil seesawed as weak third-quarter economic data helped bring oil off an early high after testing resistance above $70 a barrel amid a weaker dollar and the impending OPEC production cut. Crude futures retreated after U.S. GDP data showed a contraction in the third quarter, even though the contraction was not as bad as Wall Street had expected, and the dollar bounced off its lows. Nigeria states that it will trim export volumes by 5% in November and December due to OPEC's output cut. Iraq's oil minister said he was not satisfied with prices and will not allow prices to fall further. Iraq's oil output capacity will grow by 200,000 barrels per day next year due to measures, including the drilling of new wells, according to the Oil Minister Hussain al-Shahristani. Elsewhere U.S. Energy Information Administration natural gas storage surged by 46 billion cubic feet.
World stocks and the euro rallied for the day, boosted by sweeping gains in emerging markets after the U.S. Federal Reserve cut interest rates and opened swap lines to four developing economies. The U.S. economy shrank at a 0.3% annual rate in the third quarter, the sharpest contraction in seven years, but less than the 0.5% rate of reduction Wall Street economists surveyed by Reuters had forecast.
The number of individuals filing new claims for unemployment insurance remained unchanged in the latest survey week while the number of people continuing to receive unemployment insurance unexpectedly tumbled for the first time in four weeks, according to the Labor Department. The number of first-time claims filed for the week remained unchanged at 479,000. Economists polled by Thomson Reuters IFR Markets were expecting claims to fall slightly to 475,000 from the 478,000 claims originally reported for the week. The four-week moving average for initial claims tumbled by 5,000 to 475,500.
Natural gas in storage in the U.S. surged, but is 2.8% below the year-ago average, according to the government report. 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 surged by 46 billion cubic feet to about 3.39 trillion cubic feet for the week. However analysts had expected a boost of between 38 billion to 43 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos. The inventory level was above the five-year average of about 3.3 trillion cubic feet, but below last year's storage level of about 3.49 trillion cubic feet, according to the government data.
Courtesy: Religare Commodities
