SYDNEY — Oil held steady on Friday, hovering
at about $99 a barrel, after falling the day before as traders
took profits from a record rally that saw crude prices spike to
over $100 a barrel.
US light crude for February delivery rose 2
cents to $99.20 a barrel in Globex electronic trading. It
settled down 44 cents to $99.18 a barrel on Thursday, after
hitting a new lifetime high of $100.09 earlier in the day on
data showing a fall in US inventories.
"With the circus surrounding the breaching of
$100 due to move out of town soon, the market is now likely to
enter something of a quieter period of consolidation, before
next month’s pivotal OPEC meeting," said Paul Horsnell from
Barclays Capital Research.
Oil’s march past the $100 mark on Thursday
came after the US Energy Information Administration reported
that crude stocks fell 4 million barrels last week to a
three-year low, while heating oil supplies fell by 1.4 million
barrels to 38.4 million barrels – the eighth consecutive week of
decline.
Crude stocks in the United States, the
world’s top energy consumer, have dropped more than 25 million
barrels, or nearly 8 percent, since early November as imports
slowed down and shipments were hindered by bad weather on the
Gulf Coast.
Some analysts said the reluctance of OPEC and
other key agencies to increase crude supplies into the market,
despite oil’s break above the $100 level, combined with
geopolitical turmoil, would keep oil prices at record levels.
The Organization of Petroleum Exporting
Countries (OPEC) decided at its last meeting in December to
maintain output restrictions, while officials have lined up to
say the exporter group could do little to tame oil prices since
world markets were already well-supplied.
The Paris-based International Energy Agency (IEA)
has also echoed the White House in saying there was no need for
a release of emergency crude stockpiles.
In the days ahead, analysts said the market
would continue to watch for moves in other commodities, after
gold and platinum hit historic highs.
The US dollar is another focal point, after
it fell further against the euro and the yen on Thursday.
The closure of Mexico’s key oil ports, which
ship some 80 percent of the country’s crude exports, would also
support prices on worries that shipments to the US could be
delayed. Mexico is a top-three crude supplier to the US
The US Labor Department will release non-farm payrolls data
for December later on Friday at 1530 GMT, with worries that the
latest numbers may add to evidence the world’s largest economy
is heading towards a recession. – Reuters
