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Oil tops US$90 as US says crude stocks shrank
Source: Agencies |
December 23, 2010, Thursday
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Online Edition
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OIL prices climbed past US$90 yesterday as the U.S. government reported a drop in the nation's crude stockpiles.
Benchmark oil for February delivery rose 66 cents to settle at US$90.48 a barrel on the New York Mercantile Exchange.
In its weekly petroleum report, the Energy Department's Energy Information Administration said crude supplies dropped by 5.3 million barrels last week from the week before. That's more than twice the decline expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos. EIA said gasoline supplies grew by more than 2 million barrels.
Analysts said the drop appeared to be due to year-end inventory adjustments rather than significantly higher demand or a shortage of imports.
"Traders should not be fooled by a big draw from today's DOE data," said Stephen Schork, editor of the Schork Report newsletter. While shrinking oil inventories could help support higher prices, he noted that total supplies remain more than 10 percent above the 2004-2008 period.
Energy consultants Cameron Hanover said oil prices have been climbing and pulling up gasoline prices because investors are optimistic about the U.S. economy. Recent developments like the extension of tax cuts and the Fed's bond-buying stimulus program have convinced many that the economy will improve and, with it, demand for oil and gas.
The economic news yesterday did not throw much cold water on that. The Commerce Department said GDP rose at an annual rate of 2.6 percent between July and September, slightly below what analysts expected but an improvement from an earlier estimate. And the National Association of Realtors said sales of previously occupied homes rose almost 6 percent in November.
In other trading on the Nymex, heating oil added 1.21 cents to settle at US$2.5285 a gallon, gasoline gained 2.60 cents to settle at US$2.4245 a gallon and natural gas picked up 9.3 cents to settle at US$4.152 per 1,000 cubic feet.
In London, Brent crude rose 45 cents to settle at US$93.65 a barrel on the ICE Futures exchange.
Benchmark oil for February delivery rose 66 cents to settle at US$90.48 a barrel on the New York Mercantile Exchange.
In its weekly petroleum report, the Energy Department's Energy Information Administration said crude supplies dropped by 5.3 million barrels last week from the week before. That's more than twice the decline expected by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos. EIA said gasoline supplies grew by more than 2 million barrels.
Analysts said the drop appeared to be due to year-end inventory adjustments rather than significantly higher demand or a shortage of imports.
"Traders should not be fooled by a big draw from today's DOE data," said Stephen Schork, editor of the Schork Report newsletter. While shrinking oil inventories could help support higher prices, he noted that total supplies remain more than 10 percent above the 2004-2008 period.
Energy consultants Cameron Hanover said oil prices have been climbing and pulling up gasoline prices because investors are optimistic about the U.S. economy. Recent developments like the extension of tax cuts and the Fed's bond-buying stimulus program have convinced many that the economy will improve and, with it, demand for oil and gas.
The economic news yesterday did not throw much cold water on that. The Commerce Department said GDP rose at an annual rate of 2.6 percent between July and September, slightly below what analysts expected but an improvement from an earlier estimate. And the National Association of Realtors said sales of previously occupied homes rose almost 6 percent in November.
In other trading on the Nymex, heating oil added 1.21 cents to settle at US$2.5285 a gallon, gasoline gained 2.60 cents to settle at US$2.4245 a gallon and natural gas picked up 9.3 cents to settle at US$4.152 per 1,000 cubic feet.
In London, Brent crude rose 45 cents to settle at US$93.65 a barrel on the ICE Futures exchange.
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