Oil up slightly on growing U.S. consumer confidence

By Joshua Schneyer

NEW YORK (BestGrowthStock) – Oil rose slightly, hovering above $82 a barrel on Tuesday, as rising U.S. consumer confidence figures were offset by a firming dollar and expectations of a boost in U.S. crude inventories.

After swings between negative and positive territory, U.S. crude for December settled up 3 cents at $82.55 a barrel, gaining for a third consecutive day.

ICE Brent rose 12 cents to settle at $83.66.

U.S. consumer confidence figures rose faster in October than analysts had expected, the Conference Board reported. Greater confidence can boost energy demand.

But the confidence data was offset as the dollar rose 0.9 percent against a basket of foreign currencies, potentially denting demand for dollar-priced commodities abroad.

Analysts polled by Reuters expected weekly U.S. stocks (Read more about the stock market today. ) data to show stocks rose in the top consumer last week, by an average 1.4 million barrels. Gasoline stocks are forecast to have risen by 500,000 barrels.

U.S. oil stocks data will be released late Tuesday by industry group the American Petroleum Institute (API) while official weekly data from the U.S. Energy Information Administration is due on Wednesday morning.

“The consumer confidence data was okay, not bearish, and prevented crude from sliding,” said Andy Lebow, broker at MF Global in New York.

“But we’re trapped in a range here as the market awaits (the) Fed meeting next week and what it will bring.”


Commodities and currency markets awaited results of a U.S. Federal Reserve starting next Tuesday. The Fed is expected to approve purchases of government debt, or quantitative easing, to help pull the economy out of the doldrums.

With market expectations for easing already running high — and being priced into commodities futures — the Fed’s moves could bear heavily on markets.

“The wild card here is if the Fed action doesn’t match the QE amount now being anticipated, there could be a short-term bounce in the dollar and that could mean a sell-off for crude futures,” said Richard Ilczyszyn of Lind-Waldcock in Chicago.

Aggressive easing could undermine the value of the dollar. China, the world’s fastest-growing consumer of commodities, voiced concern on Tuesday about commodity price inflation.

Dollar issuance by the United States is “out of control,” leading to an inflation assault in China, Commerce Minister Chen Deming said in comments reported on Tuesday by the official Xinhua news agency.

Oil has mostly been trading in the $75 to $85 a barrel range since May.

Dollar gains have tended to coincide with a drop in oil prices. The inverse correlation rose to its highest level in 14 months early Tuesday, before easing as U.S. markets opened.

The inverse correlation has grown over the past two years, partly because investors have been buying emerging market shares and commodities when the dollar drops, and unloading them when it firms.


Walkouts ended at several French oil refineries on Tuesday, and fuel was leaving four of France’s 12 plants. Weeks of French strikes to protest pension reform have crimped European fuel supply. One at the key southern Fos-Lavera oil terminals was still blocking 60 oil tankers, including 40 carrying crude, the port of Marseilles said.

The strikes may have allowed U.S. refiners to ship more fuel to Europe in recent weeks. As a result, analysts forecast a significant draw in U.S. distillate stocks , which have been well above five-year averages this year. They likely fell by 1.9 million barrels in the week to October 22, a Reuters poll showed.

(Additional reporting by Christopher Johnson in London, Gene Ramos in New York and Alejandro Barbajosa in Singapore; Editing by David Gregorio)

Oil up slightly on growing U.S. consumer confidence