Futures dropped as much as 0.6 percent as the dollar reversed yesterday’s losses against the euro, limiting crude’s appeal as an inflation hedge. An Energy Department report tomorrow may show crude inventories rose 1.5 million barrels last week, according to a Bloomberg News analyst survey.
“The market will be determined by the price moves in the dollar,” said Serene Lim, an energy and commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “If you look at the inventory expectations, crude supplies should climb, so fundamentally there’s not much support.”
The December contract fell as much as 47 cents to $82.05 a barrel in electronic trading on the New York Mercantile Exchange and was at $82.14 at 12:30 p.m. in Singapore. Yesterday, it advanced 83 cents to $82.52, the highest close since Oct. 18. Prices are up 3.7 percent this year.
Workers at three French oil refineries voted to return to work as a contested pension bill neared parliamentary approval and the government warned that fuel shortages were hurting the economy. The nation’s eight remaining active plants are either on strike or shut because of a lack of crude.
The dollar traded at $1.3954 against the euro from $1.3965 in New York yesterday.
“The oil market might be taking a bit of a breather,” according to ANZ’s Lim. “I doubt the strikes had a huge effect overall on the market but it was more a psychological impact from the shutdowns.”
U.S. gasoline supplies probably climbed by 625,000 barrels last week, according to the estimates in the Bloomberg survey. Supplies of distillate fuel probably decreased for a fifth week as distributors took deliveries before winter and exports to Europe increased, the Bloomberg News survey shows.
Brent crude for December settlement traded at $83.34 a barrel, down 20 cents, on the ICE Futures Europe exchange in London. Yesterday it rose 58 cents, or 0.7 percent, to $83.54.
