WSJ: OIL FUTURES: Crude Roughly Flat Ahead Of Holidays
NEW YORK (Dow Jones)--Crude futures were roughly flat Thursday ahead of the Christmas holiday, pausing after reaching two-year highs above $90 a barrel a day earlier.
Light, sweet crude for February delivery recently traded 16 cents, or 0.2%, higher at $90.64 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange traded 10 cents higher at $93.75 a barrel.
Oil settlement on Nymex is one hour earlier Thursday, at 1:30 p.m. EST, due to the Christmas holiday. Trading on the Globex electronic exchange will close at its normal time, 4:15 p.m. EST.
Trading volume is expected to be light after oil settled above the key $90 level Wednesday, as trading desks wrap up activities heading into the holidays. A report from the Commerce Department said U.S. consumer spending rose by a modest 0.4% in November. And jobless claims fell by 3,000 to 420,000 last week, a slightly bigger decline than analysts' expectations.
The data weren't enough to rouse investors.
"It's going to be a muted session," said Carl Larry, an oil analyst with Oil Outlooks and Opinion. "Everything seems to be steady as she goes here. Everybody has kind of settled in before the Christmas holiday."
The last two months have been anything but sluggish, with oil prices rising more than 13% since mid-November. Demand from China and the U.S. has depleted some of the excess inventories that were built up during the recession. And a weak dollar has helped boost the price of crude by making oil cheaper for buyers in other currencies.
Over the past three weeks, U.S. crude inventories have fallen by 19 million barrels, according to the U.S. Department of Energy. Meanwhile, retail gasoline prices have edged up toward $3 a gallon, a level that some economists believe could start to put strains on the broader economy.
Global supplies remain high, and the Organization of Petroleum Exporting Countries has additional spare capacity that it could produce if prices rise too quickly. Ministers from the group at their meeting earlier this month said they were comfortable with crude prices around $90 a barrel, however.
Several major banks expect prices to reach triple-digits next year as demand rebounds with the improving global economy. And analysts say the next few trading days will be an important test for whether oil can hold above the $90 level.
"We expect the slightly firmer tone to return early next week," said Edward Meir, an oil analyst at MF Global, in a client note. Though he added that investors may sell some positions before the end of the year in order to lock in profits.
Front-month January reformulated gasoline blendstock, or RBOB, recently traded 0.40 cent lower at $2.4205 a gallon. January heating oil recently traded 0.01 cent lower at $2.5401 a gallon.
