Oil price slips under $83

LONDON (AFP) - Oil dipped underneath 83 dollars per barrel on Tuesday as concerns over the US economic recovery weighed on investor sentiment after poor industrial output data, analysts said. Modest gains in the US currency also affected prices as a stronger greenback makes the dollar-denominated commodity more expensive and tends to lead to lower demand. New Yorks main contract, light sweet crude for November delivery was down 28 cents at 82.80 dollars a barrel. Brent North Sea crude for December delivery was 47 cents lower at 83.90 dollars. The price of New York crude had risen sharply Monday on worries that an ongoing strike in France would disrupt European supplies. The trading pattern has been that when oil futures on the New York Mercantile Exchange hit 83 dollars, theres considerable resistance, said Victor Shum, an analyst with energy consultancy Purvin and Gertz in Singapore. He said an unexpected drop in US industrial production in September added to concerns about the recovery of the worlds biggest economy. US output fell 0.2 percent in September, wiping out a 0.2 percent gain in August, according to the Federal Reserves monthly report. The decline surprised most analysts, whose consensus forecast was for another rise of 0.2 percent. It was the first time industrial production had fallen since a 0.2 percent decline in June 2009, the month the recession in the United States ended. Shum said the drop in industrial production plus another report showing improved home-builder confidence indicates that the US economic rebound is uneven and that is tempering some of the bullish sentiment in oil. He said that for the near term, the main drivers for the market will be the value of the US dollar and equity markets. The dollar slumped last week to a near-nine month low against the euro, and a 15-year nadir against the yen, after the US Federal Reserve hinted that it could implement more monetary easing moves to shore up a faltering recovery.

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