Oil prices moved slightly lower today, weighed by a bounce back in the US dollar.
The greenback rebounded against the euro and the yen, however, the US dollar is still weak as EUR/USD rate remains close to 1.40.
The American currency has been under pressure from anticipation of further quantitative easing by the Federal Reserve. Last week’s weak non-farm payrolls data, which showed a decline of 95,000 for September, increased the likelihood that the Fed will buy more government debt to boost the slowing recovery.
It has been a quiet day in equity markets, mostly due to today’s closure of the US markets dor Columbus Day holiday in the US. The FTSE 100 and futures for the main stock market indexes in the US were up marginally.
Investors will also be looking for this week’s inventories reports.
Last week, both the American Petroleum Institute (API) and the US Energy Department reported multi-million barrels build-ups in US crude oil stockpiles. However, gasoline stockpiles unexpectedly declined, reflecting a higher level of demand in the US.
November Brent Crude declined to US$83.65/barrel, while US light, sweet crude fell to US$82.38/barrel.
BP (LON:BP) lost 1%, while other blue chip oil and gas producers were on the rise. Fellow supermajor Shell (LON:RDSB) added 1%, while Cairn Energy (LON:CNE) and Tullow Oil (LON:TLW) added 1.4%. BG Group (LON:BG) rose marginally.
Amec (LON:AMEC) was sitting just below the opening level. Another oil and gas engineering firm Petrofac (LON:PFC) advanced 2.6%.
Soco International (LON:SIA) led the midcaps, rising 4.5%. Dragon Oil (LON:DGO) and Heritage Oil (LON:HOIL) followed with gains of nearly 3%.
JKX Oil & Gas (LON:JKX) and Salamander Energy (LON:SMDR) tacked on 2.5%.
Premier Oil (LON:PMO) posted a small gain and Dana Petroleum (LON:DNX) made little headway.
Melrose Resources (LON:MRS) bucked the trend, posting a small loss.
Services company Wood Group (LON:WG) rallied 5%.
Energy focused investor Xtract Energy (LON:XTR) was among the top performing small caps with a 7.5% gain.