Oil eases below $97 a barrel, weak dollar supports
LONDON (Reuters) - Oil slipped below $97 a barrel on Thursday, after falling just shy of the $100 milestone the previous session, on hopes of greater OPEC supplies as the market continued to watch the tumbling U.S. dollar.
U.S. light crude for January delivery fell 48 cents to $96.81 a barrel by 1:26 p.m. EST, off lows of $96.37. Oil had briefly surged to a lifetime peak of $99.29 a barrel on Wednesday, before settling 74 cents lower.
London Brent crude was 24 cents lower at $94.60 a barrel.
Oil traded steady for most of the day amid thin volumes because of a market holiday in the United States, before being knocked down by a report that showed an imminent surge in OPEC oil exports.
Roy Mason of consultancy Oil Movements said OPEC oil exports, excluding Angola, will surge 720,000 barrels per day (bpd) in the four weeks to December 8, the biggest rise this year, with most of the extra supply heading to Western refiners.
Mason estimated that seaborne exports from the 11 OPEC countries would rise to 24.54 million bpd from 23.82 million bpd to November 10. NYMEX floor trading will be closed on Thursday for the Thanksgiving holiday, although Globex electronic trade continued as normal.
Oil has been rising inversely to the dollar over the past months amid a fever of speculative trading and tightening stocks ahead of the winter.
The dollar hit a record low against the euro, the Swiss franc and a basket of currencies on Thursday, as the market anticipated that the Federal Reserve would deliver an interest rate cut next month.
A mixed U.S. inventory report cut short oil's rally towards $100 on Wednesday.
Crude stocks at the delivery point for U.S. crude futures in Cushing, Oklahoma, rose 1.2 million barrels to 14.6 million barrels last week, overshadowing an overall drawdown in U.S. crude stocks.
"The inventory increase at this key physical delivery point of the NYMEX crude oil contract obviously caught the market somewhat flat-footed, leading to the price pullback," First Energy Capital said in its daily market statement.
The U.S. government showed a larger-than-expected 2.4 million-barrel drop in distillate stocks, which include heating oil and diesel fuel, ahead of a chilly winter in the U.S. northeast.
(Additional reporting by Angela Moon in Seoul, Randy Fabi and Santosh Menon in London, editing by Anthony Barker)
