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Crude oil futures - weekly outlook: December 2 - 6

Published 12/01/2013, 07:24 AM
Updated 12/01/2013, 07:24 AM
Investing.com - New York-traded crude oil futures edged higher in thin trade on Friday, as investors returned to the market to seek cheap valuations after prices fell to a six-month low in the previous session.

On the New York Mercantile Exchange, light sweet crude futures for delivery in January inched up 0.46% on Friday to settle the week at USD92.72 a barrel by close of trade.

Nymex floor trading remained closed on Thursday for the Thanksgiving Day holiday in the U.S.

The January contract tumbled to USD91.77 a barrel on Wednesday, the lowest since June 3, before settling at USD92.30 a barrel, down 1.47%.

Nymex oil futures were likely to find support at USD91.77 a barrel, the low from November 27 and resistance at USD94.69 a barrel, the high from November 26.

On the week, U.S. oil futures lost 2.23%. For November, Nymex crude oil saw a 3.2% monthly loss, as ongoing concerns over rising U.S. inventories and increased production levels weighed.

The U.S. Energy Information Administration reported Wednesday that crude oil inventories last week rose by 3 million barrels to 391.4 million barrels, the most since June.

Domestic output rose to 8.02 million barrels a day, the highest level in almost 25 years.

Concerns that the Federal Reserve will start to taper its bond-buying program at one of its next few meetings also weighed.

The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.

In the week ahead, investors will be focusing on Friday’s U.S. nonfarm payrolls report for November. The Fed, which holds its next meeting on December 17-18, has said the timing of its tapering depends on the health of the labor and housing markets.

Market players are also looking ahead to a meeting of the Organization of the Petroleum Exporting Countries in Vienna later this week. OPEC is forecast to keep its supply target unchanged at 30 million a day on December 4.

Elsewhere, on the ICE Futures Exchange in London, Brent oil futures for January delivery fell 1.06% on Friday to settle the week at USD109.69 a barrel.

The January Brent contract lost 1.22% on the week, amid expectations that more Iranian crude will come back to the market after Western powers reached a historic deal with Tehran over its nuclear program on November 24.

Meanwhile, the spread between the Brent and the crude contracts stood at USD16.97 a barrel by close of trade on Friday, narrowing from more than USD19 a barrel on Wednesday.

Despite the weekly decline, London-traded Brent futures still rose 1.4% on the month amid ongoing concerns over a disruption to supplies from Libya.

Data released on Sunday showed that China’s manufacturing purchasing managers' index held steady at an 18-month high of 51.4 in November, compared to forecasts for a decline to 51.1.

China is the world’s second largest oil consuming nation and manufacturing numbers are used as indicators for fuel demand growth.

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