Crude falls from 31-month high, OPEC says won't change output

Crude oil fell from the highest price in 31 months in New York as US equities declined and the dollar erased intraday losses against other major currencies.

Oil and the Standard & Poor’s 500 Index dropped for the first time in a week as Kimberley-Clark Corp cut its profit forecast and commodity producers decreased. Crude failed to maintain gains after touching $113.48 a barrel, the highest price since September 22, 2008. “We’re reacting to the S&P 500 and the US dollar,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “We have people adjusting their risk positions continually” as prices touched technical levels.

Oil for June delivery tumbled 68 cents, or 0.6 per cent, to $111.61 a barrel at 11:28 a.m. on the New York Mercantile Exchange. Futures have risen 31 per cent in the past year. The S&P 500 slipped 0.3 percent to 1,333.01, and the Dow Jones Industrial Average fell 50.29 points, or 0.4 percent, to 12,455.70.

Crude’s intraday high breached one set April 11 at $113.46.

“We hit that high, and people said that’s as high as we’re going to go today, so I’m going to take my profits,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. Earlier, oil jumped as gold and silver climbed to records and other commodities advanced as alternate investments to a weakening U.S. dollar. The Dollar Index, a gauge of the US currency against six counterparts such as the euro and the yen, rose as much as 0.2 per cent to 74.268. The index has fallen 6.3 percent this year.

Commodities Slip
The S&P GSCI Total Return Index of 24 commodities slipped 0.3 per cent to 749.59, data compiled by Bloomberg show. It has risen 2.2 per cent in the past week.

“The weak dollar is really continuing to be the primary driver,” said Kyle Cooper, director of research for IAF Advisors in Houston. “You’re seeing a run into gold and silver as a hedge against all the major currencies, and into oil as well and all the other commodities.”

Brent crude oil for June settlement fell 96 cents, or 0.8 percent, to $123.03 a barrel on the London-based ICE Futures Europe exchange. Most European countries have a public holiday today for Easter Monday.

OPEC unlikely to change output in June: delegates
OPEC members with spare capacity are ready to pump above agreed limits if there is a need, but the producer group is unlikely to formally change output targets at a meeting in June, Gulf delegates told Reuters on Monday.

Top producer Saudi Arabia in February raised output above nine million barrels per day (bpd), around a million bpd more than its OPEC output limit, in response to supply disruption in OPEC member Libya that drove oil prices to their highest since the record rally of 2008.

But in March, Saudi Arabia scaled back to around 8.3 million bpd, citing oversupply and weaker demand in part because of the earthquakes in Japan.