Oil edges lower; posts monthly gain

Oil prices slipped in low-volume trading on Monday, but posted big monthly gains, as the dollar rose against the yen after Japan intervened in the market to stem the rise of its currency. Brokers and analysts attributed at least some of the weak volume and choppy price movements to MF Global Holdings Ltd, the futures broker run by former Goldman Sachs chief Jon Corzine, filing for Chapter 11 bankruptcy.
"It's not going to be as easy moving accounts over to a new firm. There are going to be a lot of people in line and so I would think that it's going to be a very volatile, low volume week," said Carl Larry, of Blue Ocean Brokerage. Both Brent and US crude ended well above lows and briefly turned higher as the low trading volume, expiration of US November refined products contracts and end-of-month trading set in, brokers and analysts said.
Expectations that the dollar's strength may not last also helped crude prices recover. "The effect of (Japan's) intervention only lasts so long," said Phil Flynn, analyst at PFGBest Research in Chicago. ICE Brent December crude fell 35 cents to settle at $109.56 a barrel, still below the 50-day moving average at $109.67, after falling to $108.20. Brent posted a 6.6 percent gain for October, biggest since April, and after slumping 10.5 percent in September.
US December crude fell 13 cents to settle at $93.19 a barrel, above a $91.36 low, but surged 17.7 percent in October, biggest percentage gain since May 2009. Brent's premium to its US counterpart seesawed, but remained above $16 a barrel. US crude trading volume was 56 percent below its 30-day average and Brent 36 percent below its 30-day average. Low trading volumes also were believed to be a result of a snowstorm that hit the US Northeast over the weekend, disrupting electric power and transportation lines.
Expiring front-month November US gasoline and heating oil futures also ended lower. The 19-commodity Reuters-Jefferies CRB index fell 1.0 percent. Opec oil output fell for a second month in October as reduced supplies from Iraq, Nigeria, Saudi Arabia and Angola offset another rise in supply from Libya, according to a Reuters survey.
The International Energy Agency does not want Opec to move to cut output at the producer group's next meeting in December because the IEA expects demand for Opec oil will grow by half a million barrels per day in 2012 than it October output, a top IEA official said.
Abdullah al-Badri, Opec's secretary-general, said that the crude oil market was balanced and there was no over supply, the Iranian Oil Ministry's website SHANA reported.