Crude Prices Flirt with $100 a Barrel

Crude futures rallied Thursday and flirted with $100 a barrel, rising with equities on improved U.S. economic data and continued momentum from a report Wednesday showing a tightening oil-supply picture.

Light, sweet crude for February delivery ended the day up 86 cents, or 0.9 percent, at $99.53 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures Europe exchange was up 12 cents, or 0.1 percent, at $107.83 a barrel. Volume was about one-third of normal levels because of the holiday week.

Futures prices touched the $100-a-barrel threshold twice during the day, for the first time since last week. Oil traders chose to look past weaker economic data, with third-quarter U.S. economic growth revised downward. Traders and analysts said the market appeared primed to drive higher, ignoring what would ordinarily be caution signals.

"Wall Street wants to end this happy, happy year with oil above the psychologically important $100 level, and who's to argue with the best and brightest the Ivy League has to offer?" said Stephen Schork, analyst and editor of The Schork Report. "It's like fighting city hall. You can't fight it."

The Labor Department said initial jobless claims fell unexpectedly last week, decreasing 4,000 to 364,000 in the week ended Dec. 17, reaching the lowest level since April 2008. The Conference Board's index of leading economic indicators advanced for the seventh-straight month, and the Thomson Reuters/University of Michigan consumer-sentiment index rose.

Still, the Commerce Department said the U.S. economy expanded at an annualized rate of 1.8 percent during the third quarter, lower than its previous estimate and the analyst consensus of 2 percent.

Stocks rose, with the Dow Jones Industrial Average recently up 62 points to 12169. Oil often trades in tandem with equities. Analysts said the crude market was getting a continued boost from Wednesday's U.S. Energy Information Administration report showing weekly oil inventories dropped 10.6 million barrels to 324 million barrels, the largest drop in more than a decade and a three-year low.

Oil's gain "was kind of surprising, given the U.S. GDP number and everything else going on, unless it's just a further knock-on effect from what we saw yesterday from inventories," said Jason Schenker, president of Prestige Economics in Austin, Texas. "Market participants still continue to be ignoring the international problems and threats which are looming larger and larger every day, whereas they're focusing on tepid improvements in the U.S. economy."

Front-month January reformulated gasoline blendstock, or RBOB, ended up 1.99 cents higher at $2.6398 a gallon. January heating oil settled down 0.11 cent to $2.9076 a gallon.

Copyright (c) 2012 Dow Jones & Company, Inc.


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Our Privacy Pledge

Most Popular Articles

From the Career Center
Jobs that may interest you
Technical Sales- Decontamination/Chemical Cleaning Services
Expertise: Sales
Location: Baton Rouge, LA
Account Manager - Western US - Vapor Control & Degassing
Expertise: Sales
Location: Long Beach, CA
Sales Manager - Vapor Control/Degassing Services
Expertise: Sales
Location: Houston, TX
search for more jobs

Brent Crude Oil : $51.78/BBL 0.77%
Light Crude Oil : $50.85/BBL 0.83%
Natural Gas : $2.99/MMBtu 4.77%
Updated in last 24 hours