Oil Prices Fall Back After Previous Day's Jump
Thursday, December 13th 2007, 8:52 am
By: News On 6
VIENNA, Austria (AP) _ Oil prices fell Thursday after a jump the previous session on unexpected declines in U.S. crude and heating oil stocks and following the Federal Reserve's announcement of a plan to help banks through the credit crisis.
The almost 5 percent gain Wednesday lifted crude oil on the New York Mercantile Exchange to its highest close since Nov. 27.
But on Thursday light, sweet crude for January delivery fell 63 cents to US$93.76 a barrel by afternoon in Europe in electronic trading on the New York Mercantile Exchange. The Nymex crude contract had gained US$4.37 on Wednesday to settle at US$94.39 a barrel.
In London, January Brent crude fell 66 cents to US$93.36 a barrel on the ICE Futures exchange in London.
Crude supplies fell 700,000 barrels during the week ended Dec. 7, according to a weekly inventory report from the Energy Department's Energy Information Administration. Analysts surveyed by Dow Jones Newswires had expected a 100,000 barrel increase.
Also, the Fed said it was working with other central banks to try to counter the credit crisis, alleviating some investors' disappointment in Tuesday's cut in interest rates of just a quarter of a percentage point.
The Fed said its plan in conjunction with central banks in Canada and Europe will create a temporary auction facility to make funds available to banks and set up lines of credit for additional resources. The move is the biggest concerted liquidity injection since the aftermath of the 2001 terrorist attacks and initially boosted investor sentiment that it would spur economic growth and oil demand.
Listing ``other bullish factors,'' Vienna's PVM Oil Associates noted a ``25,000-barrel oil spill into the Norwegian sector of the North Sea'' from the Statfjord field, with a reported daily output of 100,000 barrels and forecasts that oil could hit US$105 a barrel by the end of next year.
A drop in the supplies of distillates, which include heating oil and diesel fuel, also helped to lift prices. The EIA said distillate stocks fell 800,000 barrels while the analysts polled by Dow Jones Newswires had predicted a gain of 300,000 barrels.
Total oil and product inventories have fallen for several straight weeks, which is normal for this time of year, but remain high by historical standards, according to the EIA. Analysts said this week's report also contained elements that could undercut prices, including a 1.4 million barrel increase in oil supplies at the closely watched Nymex delivery terminal in Cushing, Oklahoma.
But the market appeared to be more focused on the overall crude and heating oil numbers. Some analysts were perplexed by the focus on heating oil, noting that supplies often fall this time of year.
The EIA said gasoline supplies rose last week by 1.6 million barrels. Analysts had, on average, expected a 1.2 million barrel increase.
It also said that refinery activity fell 0.6 of a percentage point last week to 88.8 percent of capacity. Analysts had expected an increase of 0.1 percentage point to 89.5 percent of capacity.
Reports of a fire at a 350,000 barrel-a-day ExxonMobil Corp. refinery in Texas helped boost gasoline and heating oil prices Wednesday, analysts said.
Heating oil was essentially steady at US$2.643 a gallon (3.8 liters) while gasoline fell 1.58 cents to US$2.3984 a gallon. November natural gas futures rose over 5.4 cents to US$7.462 per 1,000 cubic feet.