Crude Oil Declines for First Time in Four Days as Dollar Gains

By Rachel Graham

Nov. 19 (Bloomberg) -- Crude oil fell for the first time in four days as the dollar gained against the euro, dulling the appeal of commodities as a currency hedge.

Oil fell from a one-week high reached yesterday after the U.S. Department of Energy said crude stockpiles fell unexpectedly last week. The dollar traded as high as $1.4847 against the euro on speculation European lenders will disclose more credit losses.

“We have a stronger dollar today,” Sintje Diek, an analyst with HSH Nordbank, said by phone from Hamburg. “If the dollar goes to $1.50 or above, we might see some more movement on oil.”

Crude oil for December delivery dropped as much as 58 cents, or 0.7 percent, to $79 a barrel in electronic trading on the New York Mercantile Exchange and traded at $79.22 a barrel at 8:54 a.m. London time.

The crude contract nearest delivery traded above $80 a barrel yesterday for the first time since Nov. 11 after the release of the Department of Energy data. The December contract expires tomorrow. The more actively traded January contract was at $79.73 at 8:46 a.m. London time today.

The Energy Department data showed crude inventories declined 887,000 barrels to 336.8 million last week. Stockpiles were forecast to increase 300,000 barrels, according to a Bloomberg News survey of analysts.

Brent crude oil for January settlement dropped as much as 52 cents, or 0.7 percent, to $78.95 a barrel on the London-based ICE Futures Europe exchange and traded at $79.22 as of 8:53 a.m. local time.

To contact the reporter on this story: Rachel Graham in London rgraham13@bloomberg.net