Thursday, Oct 28, 2010


 
   By Dan Strumpf 
   Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Crude-oil futures ended higher Thursday as the dollar lost ground, but uncertainty over the Federal Reserve's plan to stimulate the economy and upcoming economic data limited the size of the price move.

Light, sweet crude for December delivery settled up 24 cents, or 0.3%, at $82.18 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange added 23 cents, or 0.3%, at $83.46 a barrel.

Thursday was on track to be the lowest-volume day all year for Nymex oil-futures contracts, as traders were unwilling to open new positions ahead of Friday's release of quarterly U.S. gross domestic product data. The Federal Open Market Committee is also expected to decide next week how the central bank will act to stimulate the economy, potentially rocking commodities markets.

"It's really the calm before the storm," said Matt Smith, analyst with Summit Energy. "Crude is just holding steady at the moment and waiting to see this deluge of data coming in next week."

The looming Fed action caused the dollar to slip against other currencies, with the greenback's continued decline a factor that has supported oil's rally above $80 a barrel this month. A weaker dollar makes hard assets priced in the U.S. currency, including commodities, cheaper to buy using other currencies.

The ICE Dollar Index, which measures the greenback against a basket of other currencies, fell to 77.293 recently from 78.149 Wednesday.

Traders are looking ahead to the U.S. Commerce Department's report on GDP growth Friday. The report will offer a window into economic activity in the world's largest oil consumer, with economists surveyed by Dow Jones Newswires expecting a 2.1% increase in third-quarter GDP.

In addition, the Federal Reserve is expected to stimulate the economy next Wednesday through quantitative easing, in which the central bank buys bonds or other assets, resulting in an increase in the money supply and a weakened dollar. But uncertainty remains over the size of the stimulus and whether it will be a one-time event or a gradual process.

"Crude oil is really going to be focusing on the dollar's reaction, if any, to this [quantitative easing] stuff next week," said Darin Newsom, senior analyst at Telvent DTN.

Keeping a tether on oil prices was Wednesday's report from the U.S. Department of Energy on oil and oil-products inventories, Smith said. That report offered a mixed picture, with crude-oil inventories rising sharply, while gasoline stocks and distillates, including heating oil and diesel, fell.

"We're seeing a bit of a hangover today," he said of the effect of the inventory report.

Front-month November reformulated gasoline blendstock, or RBOB, settled 1.19 cents, or 0.6%, higher at $2.1139 a gallon. November heating oil gained 0.52 cent, or 0.2%, to $2.2435 a gallon.

More information on settlements and highs and lows for futures on Nymex and ICE platforms can be found by searching for the following headlines: 


   Nymex Light Crude Oil Close 
   Nymex Harbor RBOB Gasoline Close 
   Nymex Heating Oil Close 
   ICE Brent Crude Oil Close 
   ICE Gas Oil Close

-By Dan Strumpf, Dow Jones Newswires; 212-416-2818; dan.strumpf@dowjones.com

(END) Dow Jones Newswires

October 28, 2010 15:44 ET (19:44 GMT)