Oil Edges Higher as Dollar Falls

By Nicole Friedman 

NEW YORK--Oil prices ticked higher Tuesday as the dollar weakened, but held near multimonth lows on ongoing concerns that the market will remain oversupplied.

Light, sweet crude for December delivery recently traded up 49 cents, or 0.6%, to $81.49 a barrel on the New York Mercantile Exchange.

Prices fell to a more-than-two-year intraday low Monday after Goldman Sachs slashed its oil-price forecasts for 2015 and called for U.S. prices to fall to as low as $70 a barrel.

On Tuesday, the dollar slipped against other major currencies after the Commerce Department reported that purchases of durable goods fell by 1.3% in September, contrary to expectations of a 0.7% gain.

A weaker dollar makes oil, which is traded in dollars, more affordable to buyers using foreign currencies.

Brent recently rose 14 cents, or 0.2%, to $85.97 a barrel on ICE Futures Europe.

Oil prices have been falling for months as global supplies have remained ample and demand growth hasn't kept up with production. Brent and U.S. futures are near multimonth lows.

Barclays on Tuesday cut its price forecasts for the fourth quarter of 2014 and the first half of 2015. The bank expects Brent to average $89 a barrel in the fourth quarter, $88 a barrel in the first quarter of 2015 and $87 a barrel in the second quarter, down from its previous averages of $93 a barrel, $95 a barrel and $92 a barrel, respectively. For U.S. prices, Barclays is calling for $81 a barrel in the fourth quarter, $78 a barrel in the first quarter and $80 a barrel in the second quarter, down from $85 a barrel, $87 a barrel and $86 a barrel, respectively.

"After a period of substantial surplus in the first half of 2014, oversupply appears to be shrinking at present, but current market balance projections suggest it could expand again in early 2015," Barclays said.

The bank maintained its forecasts for the second half of 2015 on the expectation that low prices would spark demand.

November reformulated gasoline blendstock, or RBOB, recently rose 0.62 cent, or 0.2%, to $2.1764 a gallon.

November diesel gained 0.25 cent, or 0.1%, to $2.4776 a gallon.

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