WSJ: OIL FUTURES: Crude Slips In Thin Volume On Year-End Selling
By Dan Strumpf
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Oil prices crept lower in thin trading Friday, as market participants sold positions ahead of the year-end holiday season.
Light, sweet crude for January delivery fell 17 cents, or 0.2%, at $87.53 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange gave up 27 cents, or 0.3%, at $91.33 barrel.
Market observers pointed to year-end profit-taking as a major driver behind crude's modest moves lower during recent trading sessions. Trading volume remained thin, a signal that many participants have bowed out of the market ahead of the holiday season.
In addition, crude's failure to find support above the key $90 level has left traders hesitant to place large bets ahead of the year end.
"We've basically got three waves of sellers liquidating longs after a year where we've moved from substantially lower levels to near the highs for the year," said Peter Beutel, head of the oil trading advisory firm Cameron Hanover. "We've got the weekend, Christmas week and the end of the year."
Still, signs of a strengthening U.S. economic recovery continue to point to higher crude prices in 2011. The Labor Department announced a surprise decline in initial jobless claims on Thursday for the week ended Dec. 11.
"A key aspect of our bullish crude views into the new year is still a strengthening U.S. economy that continues to be featured by an almost daily flow of favorable economic releases," said Jim Ritterbusch, head of Ritterbusch and Associates.
But uncertainty persisted over the outcome of new rules from the Commodity Futures Trading Commission. The regulator said Thursday it needed more time to weigh proposed rules that would curb speculative trading on commodities such as crude oil, metals and other raw materials.
The commission estimates that about 40 energy traders would be affected by new position limits on spot-month trading. The move to impose stricter trader guidelines comes amid criticism the CFTC faced in 2008 when oil prices spiked to record highs.
Front-month January reformulated gasoline blendstock, or RBOB, recently traded up 0.29 cent, or 0.1%, at $2.3072 a gallon. January heating oil fell 0.66 cent, or 0.3%, at $2.4697 a gallon.
