Oil reversed losses in New York as the dollar fell against the euro, increasing the appeal of commodities as an alternative investment.
Crude earlier declined as much as 0.7 percent after the euro strengthened 0.3 percent against the greenback. U.S. payrolls excluding government agencies probably increased in September, according to a Bloomberg News survey of economists before a report today, supporting traders’ expectations that the economy is stabilizing in the world’s largest oil consumer.
“The weakening dollar is putting a reasonable floor under the price of oil,” said Gavin Wendt, a director at commodity analysts Mine Life Resources Ltd. in Sydney. “Everyone is looking for an indication of the underlying health of the economy. A lot of speculators have bet on oil to push higher.”
Crude for November delivery was unchanged at $81.67 a barrel in electronic trading on the New York Mercantile Exchange at 2:52 p.m. Singapore time. The contract earlier lost as much as 56 cents to $81.11. Yesterday, it plunged $1.56, or 1.9 percent, to $81.67, the biggest drop since Sept. 16.
The U.S. currency was at $1.3941 against the euro, slipping from $1.3926 yesterday in New York, when it slumped to $1.4029, the weakest since Jan. 28. Investors tend to buy commodities when the dollar falls.
Oil, set for a third weekly gain, has climbed 3 percent this year amid speculation the global economic recovery would boost fuel demand.
Private payrolls in the U.S. probably increased 75,000 in September after slowing to a 67,000 gain in August, according to a Bloomberg News survey. Overall nonfarm payrolls may have declined by 5,000 last month.
“If the jobs figure were to be negative, that might have some impact on oil, pushing it lower,” said Wendt at Mine Life. “But that will be offset by the realization that the Federal Reserve will step in with more stimulus and that will mean a lower dollar and higher oil.”
Fed Chairman Ben S. Bernanke said Oct. 4 the central bank’s first round of large-scale asset purchases, known as quantitative easing, aided the economy and further buying is likely to help more.
Brent crude for November settlement was at $83.52 a barrel, up 9 cents, on the ICE Futures Europe exchange in London. The contract earlier lost as much as 40 cents, or 0.5 percent, to $83.03 a barrel.