Oil up, choppy tracking weaker dollar

By Robert Gibbons

NEW YORK (BestGrowthStock) – U.S. oil prices edged up in choppy trading on Monday, having retreated from an early spike above $83 a barrel, as the dollar pared losses after being knocked lower by disappointing results from a Group of 20 meeting.

Early Monday, oil found support as the dollar slumped to a 15-year low against the yen and traded above $1.40 versus the euro, as the G20 agreement to shun competitive currency devaluations was taken by investors as a signal to resume selling the dollar.

The dollar then cut losses against the euro after better-than-expected U.S. September existing home sales data, with the dollar index (Read more about the global trade. ) (.DXY: ) bouncing off its low.

U.S. crude for December delivery rose 8 cents, or 0.1 percent, to $81.77 per barrel by 1:16 p.m. EDT, well off the $83.28 intraday high.

In London, ICE Brent December crude fell 11 cents, or 0.13 percent, to $82.85 a barrel.

Oil’s recent volatility has investors cautious about adding fresh long positions, sources said, and Wall Street also pared its gains, helping curb oil’s earlier push above $83 a barrel.

“There was very low participation from new length once New York trading opened. Crude was basically bid up on the back of G20 and dollar reaction,” said Michael Guido, head of hedge fund sales in commodities for Macquarie Bank in New York.

“However, we still remain in this horrible choppy range, leaving confidence low when establishing or adding to a vested long book.”

U.S. stocks (Read more about the stock market today. ) were lifted as the weak dollar and expectations of economic stimulus from the U.S. Federal Reserve prompted investors to pick up riskier assets. (.N: )

The U.S. Federal Reserve’s policy meeting in early November is expected to have the central bank take up the question of another round of monetary easing, or quantitative easing.

“Since there was no major agreement at the G20 meeting about trade imbalances at its weekend meeting, we are back to the status quo, and that is, we expect quantitative easing from the Fed,” said Phil Flynn, analyst at PFGBest Research in Chicago.

Oil has received support from strikes in France over pension and port reforms, which have reduced fuel supplies, shut refineries and disrupted shipping.

Workers at seven out of France’s 12 refineries voted to continue striking on Monday. But at Exxon Mobil’s (XOM.N: ) Port-Jerome and Fos-sur-Mer refineries workers voted to end their strike.

Workers at the Petroplus (PPHN.VX: ) Reichstett refinery voted to lift a blockade at the plant and awaited crude oil supplies for the refinery to restart production.

Oil traders continued to watch the potential for weather disruption to Gulf of Mexico output. But Hurricane Richard was downgraded to a tropical storm and then into a tropical depression over Mexico as it headed into the Gulf of Mexico.

Mexico’s state run oil company Pemex said the system would not affect the country’s offshore production.

(Additional reporting by Gene Ramos in New York, Alex Lawler in London and Alejandro Barbajosa in Singapore; Editing by Walter Bagley)

Oil up, choppy tracking weaker dollar