Crude futures retreated below $90 a barrel for the first time since Dec. 21, on news that U.S. oil inventories aren't declining as expected.
Light, sweet crude for February dropped $1.28, settling at $89.84 a barrel Thursday. The U.S. Department of Energy reported that crude inventories fell by 1.3 million barrels to 339.4 million in the week ended Dec. 24. Meanwhile, initial benefit claims decreased by 34,000 to 388,000 in the week ended Dec. 25, according to the U.S. Department of Labor. An agency official noted no specific factors contributing to the decline.
Despite government figures, analysts remain optimistic that crude futures will exceed the $100-mark in 2011 on global economic recovery.
Natural gas for February delivery climbed for a fourth day—to two-week highs—on forecasts of colder-than-average weather. Natural gas futures for Thursday settled at $4.34 per thousand cubic feet, up 5.1 cents, after fluctuating between $4.24 and $4.36.
The cooler temperatures trumped the smaller-than-expected decline in inventories. The U.S. Energy Information Administration said stockpiles for the week ended Dec. 24 were 3.232 trillion cubic feet—a drop of 136 billion cubic feet (bcf). The inventory drop was larger than the five-year average withdrawal of 118 bcf.
Gasoline prices inched up 0.14 cent to settle at $2.39 a gallon, trading between $2.37 and $2.42.
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