* Hurricane Ida shuts in Gulf of Mexico oil output
* Dollar under pressure, equities rise
* Saudi Arabia lifts Dec oil supply to global oil firms
(Adds Saudi supplies, updates prices)
By Barbara Lewis
LONDON, Nov 9 (Reuters) - Oil rose well over a dollar to
more than $79 a barrel on Monday after Hurricane Ida forced the
shut in of U.S. oil and gas production and Group of 20 talks
sent equities up and the dollar down.
U.S crude for December delivery <CLc1> rose $1.74 to $79.17
a barrel by 1409 GMT, just off a session high of $79.23. The
contract had fallen by 3 percent on Friday.
London Brent crude <LCOc1> gained $1.63 to $77.50.
Hurricane Ida, the first real storm threat of the 2009
season, was downgraded to Category 1 on Monday, but only after
U.S. oil companies had shut in production and evacuated workers.
[]
"I think it's more buy on the rumour, sell on the fact. It
does not seem as if it's (Ida is) strong enough to create
structural damage," said Olivier Jakob of Petromatrix.
"Nothing fundamental has really changed, but you buy because
of the dollar and equities."
Oil prices have rallied from a low of below $33 a barrel hit
last December, in line with a rally sustained for much of the
year on equities. Stock markets have factored in economic
recovery, which would have implications for fuel demand.
At the same time, the dollar <.DXY> has weakened, which can
act as a spur to dollar-dominated commodities, such as oil and
gold.
Gold <XAU=> touched a record high above $1,100 an ounce on
Monday [], while the The MSCI world equity index
<.MIWD00000PUS> increased by around one percent after the Group
of 20 pledged to keep stimulus packages in place until economic
recovery was assured. []
PRICES VULNERABLE
For oil prices, the market's failure to sustain the strength
that took it to a year-high of $82 a barrel in October was seen
as bearish and speculators have begun to unwind long positions.
The latest data from the Commodity Futures Trading
Commission on Friday showed money managers had reduced their net
long crude positions on the New York Mercantile Exchange.
[]. Speculative length is still historically high
and analysts said further selling was likely.
Fuel inventories are brimming, with U.S. distillate stocks,
which include heating oil and diesel, at their highest levels
for more than a quarter of a century.
Potentially adding to the oil surplus, Saudi Arabia, the
world's top oil exporter, has increased December supplies to
large companies and one Asian customer expected to receive full
contract volume.
For most, however, deep output cuts were still being
enforced and supplies to many were around steady. []
Some in the Organization of the Petroleum Exporting
Countries have raised the possibility of an increase in
production when the group meets in December, but only if oil
prices continued to rise and economic recovery were maintained.
United Arab Emirates Oil Minister Mohammed al-Hamli said at
the weekend raising oil production was not on the agenda for the
producer group. []
(For a graphic on the path of Hurricane Ida click on:
http://graphics.thomsonreuters.com/119/US_HKIDA1109.gif)
(Additional reporting by Joe Brock; Editing by Keiron Henderson
and Karen Foster)
