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Friday, January 09, 2015

Crude shakes off earlier weakness and ends higher

Prices have slumped 8.4% so far this month 


Crude oil prices ended higher on Thursday, 08 January 2015 shaking off earlier weakness, while Brent prices hit fresh multi-year lows but held above $50 a barrel. But natural gas prices jumped on larger-than-expected decline in inventories. 

Light, sweet crude futures for delivery in February rose 14 cents, or 0.3%, to settle at $48.79 a barrel on the New York Mercantile Exchange. Prices, which have slumped 8.4% so far this month, found some footing thanks in part to Wednesday's weekly U.S. inventory report that showed a surprise decline in crude supplies as well as expectations of a strong monthly U.S. jobs report on Friday. 

World stock markets have rebounded from this week's sharp sell offs. The U.S. dollar index continues on its strong bull market run, hitting another 10-year high today. The Euro currency slumped to another nine-year low versus the greenback on Wednesday. The surging greenback remains a major, bearish underlying factor working against the raw commodity markets. 

A day before on Wednesday hit a 5.5-year low of $46.83 a barrel, basis nearby Nymex futures. Traders are awaiting arguably the most important U.S. economic data point of the month—the U.S. employment situation report due out Friday morning. The key non-farm payrolls number is expected to have risen by 240,000 workers in December. 

U.S. economic data out Thursday includes the weekly jobless claims report, the Challenger job cuts report, and ICSC chain store sales trends. Initial jobless claims dropped to 294,000 last week from an unrevised 298,000 in the prior week, the Labor Department said on Thursday. Market had expected claims to total 290,000. Weaker-than-expected economic data often boosts haven demand for gold. 

Among other energy products, February gasoline turned higher, ending Thursday up less than a penny, or 0.3%, to settle at $1.3409 a gallon on Nymex. February heating oil also turned higher, up 1 cent, or 0.7%, to $1.7110 a gallon on Nymex. 

Elsewhere in energy trading, natural gas for February delivery rose nearly 6 cents, or 2%, to end at $2.9270 per million British thermal units, as stockpiles fell. Natural-gas inventories declined 131 billion cubic feet in the week ended 02 January. Market had expected a decline between 117 bcf and 121 bcf. 
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