Oil below $87 in Asia, retreating from year high

[November 09, 2010]  BANGKOK (AP) -- Oil prices hovered under $87 a barrel Tuesday in Asia, retreating from a high for the year as regional stock markets fell.

Benchmark oil for December delivery was down 21 cents at $86.85 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange.

Oil settled up 21 cents at $87.06 a barrel on Monday -- a closing high for the year. Earlier in the day it reached $87.49, eclipsing the previous intraday high of $87.15 in early May as October's better-than-expected jobs figures added to expectations that demand for fuel will improve.

In Asia on Tuesday, crude traders took their cues from stock markets which were mostly lower as euphoria over the Federal Reserve's massive stimulus faded, halting a rally that drove some of the region's benchmarks to record highs.

The U.S. Labor Department reported on Friday that employers added 151,000 jobs in October, the first net gain in five months. The unemployment rate remained at 9.6 percent.

The jobs report could signal more improvement in the world's largest economy, which could lead to stronger demand from consumers and businesses for fuel. In the short-term, however, improved economic indicators could strengthen the dollar and dampen enthusiasm for oil.

Oil is priced in dollars and becomes cheaper for holders of foreign currency when the dollar is weaker against other currencies.

In other Nymex trading in December contracts, heating oil was little changed at $2.40 a gallon and gasoline was steady at $2.18 a gallon. Natural gas added 8 cents to $4.17 per 1,000 cubic feet.

In London, Brent crude fell 30 cents to $88.16 a barrel on the ICE Futures exchange.

[Associated Press]

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