Oil ends 2007 with a $35 a barrel gain on supply woes
Crude oil, which climbed more than $35 a barrel last year on Middle East tensions, rising demand and supply disruptions, closed little changed on Monday after the dollar strengthened.
Oil and the dollar usually move in opposite directions because a rising currency reduces the appeal of commodities as an investment. The dollar, which fell against the euro for a second year, appreciated the most in more than two weeks on a report that home sales unexpectedly increased last month.
“The dollar has done well, and the crude-oil market has turned back to negative on the day,” said Eric Wittenauer, an analyst at A.G. Edwards & Sons Inc. in St. Louis. “We did put in new lows off the data. Not necessarily because the housing numbers directly impact the oil market, but the dollar does impact the crude oil pit.”
Crude oil for February delivery fell 2 cents to close at $95.98 a barrel at 3:03pm on the New York Mercantile Exchange. Prices rose 57 per cent in 2007, the biggest annual percentage gain since 2002. New York futures reached a record $99.29 on November 21 as a weaker dollar made crude cheaper in other currencies.
Brent crude for February settlement fell 3 cents to settle at $93.85 a barrel on London’s ICE Futures Europe exchange. The London benchmark has risen 54 per cent this year, the most since 1999 when prices more than doubled.
Crude prices in New York have gained 42 per cent in euros this year,
Sales of existing homes in the US in November rose 0.4 per cent to an annual rate of 5 million, the National Association of Realtors said in Washington on Monday. Transactions were down 20 per cent from November 2006 and the median home price fell 3.3 per cent.
Also pressuring prices were forecasts from AccuWeather.com for mild temperatures on the US East Coast through mid-January. New York may be as warm as 52 degrees Fahrenheit (11 Celsius) next week, compared with a normal high of 38 degrees.
“We continue to hear that North America, especially east of the Mississippi, is more likely to get a mild winter, especially in January and February” said Paul Crovo, a Philadelphia-based oil analyst with PNC Capital Advisors. “We think that will help the oil situation by lowering demand for heating oil.”
US oil inventories probably fell for a seventh straight week last week as refiners increased processing rates to make fuel, a Bloomberg News survey indicated. Supplies fell to the lowest in almost three years in the week ended on December 21 because of a drop in inventories in states along the Gulf Coast.
Oil stocks survey
Stockpiles probably dropped 3.15 million barrels in the week ended on December 28 from 293.6 million barrels the week before, according to the median of responses by four analysts before a January 3 Energy Department report. All the analysts said supplies dropped. Source
Oil and the dollar usually move in opposite directions because a rising currency reduces the appeal of commodities as an investment. The dollar, which fell against the euro for a second year, appreciated the most in more than two weeks on a report that home sales unexpectedly increased last month.
“The dollar has done well, and the crude-oil market has turned back to negative on the day,” said Eric Wittenauer, an analyst at A.G. Edwards & Sons Inc. in St. Louis. “We did put in new lows off the data. Not necessarily because the housing numbers directly impact the oil market, but the dollar does impact the crude oil pit.”
Crude oil for February delivery fell 2 cents to close at $95.98 a barrel at 3:03pm on the New York Mercantile Exchange. Prices rose 57 per cent in 2007, the biggest annual percentage gain since 2002. New York futures reached a record $99.29 on November 21 as a weaker dollar made crude cheaper in other currencies.
Brent crude for February settlement fell 3 cents to settle at $93.85 a barrel on London’s ICE Futures Europe exchange. The London benchmark has risen 54 per cent this year, the most since 1999 when prices more than doubled.
Crude prices in New York have gained 42 per cent in euros this year,
Sales of existing homes in the US in November rose 0.4 per cent to an annual rate of 5 million, the National Association of Realtors said in Washington on Monday. Transactions were down 20 per cent from November 2006 and the median home price fell 3.3 per cent.
Also pressuring prices were forecasts from AccuWeather.com for mild temperatures on the US East Coast through mid-January. New York may be as warm as 52 degrees Fahrenheit (11 Celsius) next week, compared with a normal high of 38 degrees.
“We continue to hear that North America, especially east of the Mississippi, is more likely to get a mild winter, especially in January and February” said Paul Crovo, a Philadelphia-based oil analyst with PNC Capital Advisors. “We think that will help the oil situation by lowering demand for heating oil.”
US oil inventories probably fell for a seventh straight week last week as refiners increased processing rates to make fuel, a Bloomberg News survey indicated. Supplies fell to the lowest in almost three years in the week ended on December 21 because of a drop in inventories in states along the Gulf Coast.
Oil stocks survey
Stockpiles probably dropped 3.15 million barrels in the week ended on December 28 from 293.6 million barrels the week before, according to the median of responses by four analysts before a January 3 Energy Department report. All the analysts said supplies dropped. Source
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