By Ann Koh
Nov. 26 (Bloomberg) -- Oil fell from near a one-week high amid concern Ireland?s debt crisis will spread to Portugal and Spain, limiting economic growth and diminishing fuel demand.
Futures slipped as the euro dropped toward a two-month against the dollar, curbing investor demand for commodities priced in the U.S. currency. Crude rose the most in four months on Nov. 24, jumping 3.2 percent, after U.S. jobless claims fell to the lowest level since 2008, bolstering optimism economic growth will accelerate in the biggest oil-consuming nation.
?The euro tends to sum up the concerns on the ground and the risks or premiums associated with possible defaults,? said Mark Keenan, chief investment officer at fund manager Cubit Asset Management Pte in Singapore. ?Overall the backdrop of fundamental data for crude isn?t hugely bullish at the moment.?
The January contract fell 25 cents, or 0.3 percent, to $83.61 a barrel in electronic trading on the New York Mercantile Exchange at 2:28 p.m. Singapore time. Crude fell as much as 0.5 percent to $83.45 a barrel yesterday. Floor trading was closed yesterday for Thanksgiving in the U.S. and electronic trades are booked with today?s for settlement purposes. Prices are up 2.7 percent this week and 5.5 percent this year.
The euro declined to $1.3317 as of 3:03 p.m. in Tokyo from $1.3360 in New York yesterday, after reaching $1.3285 on Nov. 24, the lowest level since Sept. 22. The single currency has fallen 2.6 percent this week.
Oil gained earlier today as speculation higher refinery output in China to meet a diesel shortage will boost demand. China?s oil-product stockpiles fell 5.2 percent in October from a month earlier, Xinhua News Agency said on Nov. 22. PetroChina Co., the biggest oil and gas producer in the nation, said this week that it?s planning additional diesel imports from overseas.
?March? to $90
?Robust U.S. economic statistics, plunging fuel supplies, and China?s diesel famine should help oil prices march toward $90 a barrel,? Gordon Kwan, the Hong Kong-based head of regional energy research at Mirae Asset Securities Ltd., said in a report today.
Oil prices are forecast to be little changed next week as signs of U.S. economic recovery are balanced by concerns that Europe?s debt crisis may hurt growth and fuel demand, according to a Bloomberg News survey.
Fifteen of 36 analysts, or 42 percent, predicted crude oil will be little changed through Nov. 26. Last week, 47 percent said futures would rise.
Brent crude for January settlement fell as much as 56 cents, or 0.7 percent, to $85.54 a barrel on the London-based ICE Futures Europe exchange. The contract gained 26 cents, or 0.3 percent, to settle at $86.10 a barrel yesterday.
--With assistance from Ben Sharples in Melbourne. Editors: Jane Lee, Clyde Russell.
To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.net
To contact the editor responsible for this story: Clyde Russell in Singapore at crussell7@bloomberg.net
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