Crude Oil Rebounds To End Sharply Higher

(RTTNews) - U.S. crude oil rebounded to end sharply higher on Friday, after having plunged nearly four percent yesterday, amid hopes the Organization of the Petroleum Exporting Countries will cut its production to help pull back prices. Oil prices also found support with the dollar weakening against a basket of major currencies.

Meanwhile, reports say OPEC nations disagreed with each other on whether to inflate crude oil prices by cutting production. Venezuela is among the cartel members making the case for higher prices ahead of OPEC's meeting in Vienna later this month.

The official weekly report from the U.S. Energy Information Administration on Thursday showed U.S. crude oil inventories to have dropped by 1.7 million barrels in the week ended November 7, which was well below analysts expectation of a 0.5 million barrels decline. The EIA report showed U.S. crude oil inventories at 378.5 million barrels, end last week.

Oil prices show no signs stabilizing, according to the International Energy Agency (IEA), blaming weak demand, dollar strength and record U.S. oil production.

"Supply/demand balances suggest that the price rout has yet to run its course," the IEA said in its new monthly report, released on Friday morning. "Our supply and demand forecasts indicate that barring any new supply disruption, downward price pressures could build further in the first half of 2015."

Light Sweet Crude Oil futures for December delivery, the most actively traded contract, surged $1.61 or 2.2 percent to close at $75.82 a barrel on the New York Mercantile Exchange Friday.

Crude prices for December delivery scaled a high of $76.30 a barrel intraday and a low of $73.25.

On Thursday, crude oil futures plunged $2.97 or 3.8 percent to close at $74.21 a barrel, on demand growth concerns with renewed worries of a supply glut.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 87.55 on Friday, down from its previous close of 87.77 late Thursday in North American trade. The dollar scaled a high of 88.27 intraday and a low of 87.43.

The euro trended higher against the dollar at $1.2521 on Friday, as compared to its previous close of $1.2476 late Thursday in North American trade. The euro scaled a high of $1.2543 intraday and a low of $1.2400.

In economic news, a report from the Commerce Department showed U.S. retail sales in October rebounded more than anticipated, having reported a modest drop in sales in the previous month. The rebound was partly attributed to a jump in sales by non-store retailers. U.S. retail sales rose 0.3 percent in October, offsetting the 0.3 percent drop seen in September. Economists expected sales to edge up by 0.2 percent.

Separately, a Commerce Department report showed U.S. business inventories to have increased in line with economist estimates in September. Business inventories rose 0.3 percent in September after inching up by a downwardly revised 0.1 percent in August. Economists expected inventories to climb by 0.3 percent compared to the 0.2 percent uptick originally reported for the previous month. Manufacturing inventories edged up by 0.2 percent, while retail and wholesale inventories both rose by 0.3 percent.

Consumer sentiment in the U.S. has improved much more than anticipated in November, a report from Thomson Reuters and the University of Michigan showed Friday. A preliminary reading on the consumer sentiment index for November came in at 89.4 compared to the final October reading of 86.9. Economists expected the index to show a more modest increase to 87.5. The consumer sentiment index scaled its highest level since July 2007.

Meanwhile, a Labor Department report on Friday showed a notable decrease in U.S. import prices in October, with fuel prices dropping sharply. The import price index tumbled 1.3 percent in October after falling by a revised 0.6 percent in September. Economists expected import prices to drop by 1.5 percent compared to the 0.5 percent decrease originally reported for the previous month.

The Eurozone economy grew at a faster-than-expected pace in the third quarter, helped by economic recovery in Germany and France, while Italy contracted again. Gross domestic product grew a seasonally adjusted 0.2 percent from the second quarter, flash estimates from Eurostat showed Friday. Economists forecast the growth rate to remain unchanged at 0.1 percent.

Among major economies in the eurozone, Germany and France dodged recession, while Italy shrank again taking the economy back into recession.