* OPEC to keep oil output targets unchanged []
* Dollar <.DXY> hits 10-month low against currency basket
* Technicals show oil to top five-month high []
* Coming Up: U.S. EIA weekly oil stock data at 1500 GMT
(Updates detail, prices)
By Christopher Johnson
LONDON, Oct 14 (Reuters) - Oil rose toward five-month highs
on Thursday in a broad-based commodity rally fuelled by a slump
in the dollar and following news of a surprise drop in U.S.
stockpiles.
Ministers from the Organization of the Petroleum Exporting
Countries decided in Vienna to keep oil production unchanged,
maintaining a supply policy that has served it well for nearly
two years. For Reuters stories on OPEC, click: []
OPEC is happy with oil prices as they are and wants to do
nothing to disrupt the supply-demand balance in the market.
U.S. crude for November <CLc1> climbed $1.11 to a high of
$84.12 a barrel, before slipping back to around $83.45 by 1315
GMT. Last week, it hit a peak of $84.43, the highest since May
4. ICE Brent added 4 cents to $84.68.
The dollar fell to its lowest in 10 months against a basket
of currencies <USD=> <.DXY>, giving up 0.7 percent on the day,
making oil imports cheaper for emerging economies, while the
euro rose to an eight-month high. []
"Today's move higher is all about the dollar," said Carsten
Fritsch, commodities analyst at Commerzbank in Frankfurt.
"Investors believe that a weak dollar is good for commodities,
so they buy. It is a self-fulfilling prophesy."
Christopher Bellew, broker at Bache Commodities, agreed: "I
think that right now the oil price is so strong because of the
weak dollar and strong prices across all commodities as an asset
class," Bellew said.
Ecuador, which holds OPEC's rotating presidency, confirmed
the cartel had settled on no change in output and said the
group's next conference would be in Quito on Dec. 11.
Earlier a delegate told Reuters the ministers had been "100
percent" in agreement there was no need to change policy.
"The biggest challenge we have is to keep the oil market as
it is today," Saudi Arabian Oil Minister Ali al-Naimi said.
Oil prices did not react to the widely-expected OPEC deal.
QUANTITATIVE EASING
Expectations of a fresh round of expansionary monetary
policy, or quantitative easing, by the U.S. Federal Reserve and
other central banks is helping fuel a rise in commodities.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
For a graphic of various asset returns since Federal Reserve
Chairman Ben Bernanke said in August that the Federal Reserve
was ready to take more steps to boost the U.S. economy, click:
http://graphics.thomsonreuters.com/F/10/GLB_MKTQEP.html
For a graphic of oil versus gold and copper, click:
http://graphics.thomsonreuters.com/AS/0810/ABE_20101410150319.jpg ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Improving fundamentals in the oil market, including falling
inventories in the United States, rebounding OECD demand and
soaring imports in China, are also encouraging buying of crude
oil ahead of the northern hemisphere winter heating season.
U.S. crude inventories fell unexpectedly last week, partly
because of the closure of the Houston Ship Channel, shedding 4
million barrels against an expected increase of 1.1 million, the
American Petroleum Institute (API) said on Wednesday. []
Gasoline and distillate stocks, including heating oil and
diesel, also fell by 1.9 million barrels and 254,000 barrels,
respectively, versus forecasts from a Reuters survey for drops
of 1 million and 1.1 million barrels. []
Government data on U.S. stocks and demand from the Energy
Information Administration is due at 1500 GMT. []
(Additional reporting by Alejandro Barbajosa; editing by Jane
Baird)
