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Oil near US$97 amid light Thanksgiving volume
Source: Agencies |
November 25, 2011, Friday
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Oil prices rose to near US$97 a barrel yesterday amid lower US crude inventories and light trading volume because of the Thanksgiving holiday.
By early afternoon in Europe, benchmark crude for January delivery was up 79 cents at US$96.96 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell US$1.84 to settle at US$96.17 in New York on Wednesday.
In London, Brent crude for January delivery rose US$1.03 to US$108.05 a barrel on the ICE Futures exchange.
Markets in the US are closed yesterday for Thanksgiving.
Crude has fallen from above US$103 last week amid investor concern that Europe's debt crisis will undermine global economic growth and oil demand.
Wednesday's unsuccessful bond auction in Germany and signs that France may see its triple A credit rating downgraded kept gains in check.
"Economic conditions continue to remain fairly chaotic," said analysts at Sucden Financial in London. "Serious debt issues continue to dominate the markets, raising persistent concerns about the eurozone's economic stability."
However, falling crude inventories in recent months in the US helped sustain prices.
Crude supplies fell by 6.2 million barrels last week and are about 8 percent below levels a year earlier, the Energy Department's Energy Information Administration said Wednesday.
"The low inventory situation has prevented oil prices from falling sharply," Bank of America Merrill Lynch said in a report. "But eventually, deteriorating financial conditions could start to impact economic activity and bring oil prices somewhat lower."
Bank of America said it expects Brent crude to average US$104 in the first quarter of next year.
"Lower imports and increased refinery utilization have contributed to the pronounced reduction in crude oil inventories," said a report from Commerzbank in Frankfurt, adding that US crude stockpiles are now at their lowest level since early 2010.
Some analysts predict robust growth in demand for commodities from developing countries will outstrip production capacity increases and push prices higher.
"We believe that the oil market has been too focused on the downside risks to prices and not focused enough on the upside risk should the economy avoid recession," Goldman Sachs said in a report.
In other Nymex trading, heating oil rose 2.19 cents to US$2.9933 per gallon and gasoline futures gained 2.71 cents to US$2.5476 per gallon. Natural gas lost 2.3 cents to US$3.437 per 1,000 cubic feet.
By early afternoon in Europe, benchmark crude for January delivery was up 79 cents at US$96.96 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell US$1.84 to settle at US$96.17 in New York on Wednesday.
In London, Brent crude for January delivery rose US$1.03 to US$108.05 a barrel on the ICE Futures exchange.
Markets in the US are closed yesterday for Thanksgiving.
Crude has fallen from above US$103 last week amid investor concern that Europe's debt crisis will undermine global economic growth and oil demand.
Wednesday's unsuccessful bond auction in Germany and signs that France may see its triple A credit rating downgraded kept gains in check.
"Economic conditions continue to remain fairly chaotic," said analysts at Sucden Financial in London. "Serious debt issues continue to dominate the markets, raising persistent concerns about the eurozone's economic stability."
However, falling crude inventories in recent months in the US helped sustain prices.
Crude supplies fell by 6.2 million barrels last week and are about 8 percent below levels a year earlier, the Energy Department's Energy Information Administration said Wednesday.
"The low inventory situation has prevented oil prices from falling sharply," Bank of America Merrill Lynch said in a report. "But eventually, deteriorating financial conditions could start to impact economic activity and bring oil prices somewhat lower."
Bank of America said it expects Brent crude to average US$104 in the first quarter of next year.
"Lower imports and increased refinery utilization have contributed to the pronounced reduction in crude oil inventories," said a report from Commerzbank in Frankfurt, adding that US crude stockpiles are now at their lowest level since early 2010.
Some analysts predict robust growth in demand for commodities from developing countries will outstrip production capacity increases and push prices higher.
"We believe that the oil market has been too focused on the downside risks to prices and not focused enough on the upside risk should the economy avoid recession," Goldman Sachs said in a report.
In other Nymex trading, heating oil rose 2.19 cents to US$2.9933 per gallon and gasoline futures gained 2.71 cents to US$2.5476 per gallon. Natural gas lost 2.3 cents to US$3.437 per 1,000 cubic feet.
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