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26 February 2024

Oil prices rise to mid-$92 after sharp decline

By Agencies


Oil prices rose slightly Friday after declining more than $2 a barrel in the previous session as investors sold futures contracts on expectations of an ongoing price slide.

Oil prices fell steeply overnight after a gain of almost 5 per cent on Wednesday. Two causes of the midweek surge in oil prices evaporated Thursday when the US dollar strengthened and Exxon Mobil Corp. said a Texas refinery suffered no production outages from a fire.

On Friday, light, sweet crude for January delivery added 39 cents to $92.64 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore.

The contract fell $2.14 to settle overnight at $92.25 a barrel. It had jumped $4.37, or 4.9 per cent, on Wednesday to its highest close since November 27 on unexpected declines in US crude stockpiles.

Crude supplies fell 700,000 barrels during the week ended December 7, according to a weekly inventory report from the US Energy Department's Energy Information Administration. Analysts surveyed by Dow Jones Newswires had expected a 100,000 barrel increase.

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.

An increase in oil supplies at the closely watched Nymex delivery terminal in Cushing, Oklahoma, however, has pushed the price of January crude below the price of February crude. It's the first time since August the price of a front-month contract has fallen below a contract for later delivery.

That price relationship is seen as an indication that oil supplies are rising and prices will fall. In electronic trade Friday, February crude rose 31 cents to $92.77 a barrel Friday.

A firming of the dollar Thursday neutralized another reason many analysts have cited for oil's run last month to above $99 a barrel.

Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.

Heating oil futures added 1.33 cents to $2.628 a gallon (3.8 liters) while gasoline prices rose 0.76 cent to $2.382 a gallon.

Natural gas futures rose 1.1 cents to $7.204 per 1,000 cubic feet.

In London, January Brent crude added 48 cents to $92.60 a barrel on the ICE Futures exchange. (AP)