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Crude oil tops USD99 after largest U.S. supply drop since 2001

Commodities Dec 22, 2011 03:56AM ET
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Investing.com – Crude oil futures extended gains from the previous session on Thursday, trading above USD99-a-barrel supported by a broadly weaker U.S. dollar and amid indications U.S. oil demand was strengthening.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at USD99.09 a barrel during European morning trade, climbing 0.43%.       

It earlier rose by as much as 0.73% to trade at USD99.40 a barrel, the highest since December 14.

Crude’s gains came as the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, declined 0.35% to trade at 80.07.

Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.

Meanwhile, prices continued to draw support from Wednesday’s government report showing that U.S. crude oil inventories dropped by 10.6 million barrels last week, the largest weekly drawdown since the week ended February 16, 2001.

Total U.S. crude oil inventories stood at 323.6 million barrels as of last week, the lowest level since December 2008.

The U.S. is the world’s largest oil consuming nation, accounting for nearly 22% of global oil demand, according to British Petroleum Statistical Review of World Energy.

Lingering concerns that the West would impose tougher sanctions on Iran over the country’s nuclear program provided further support.

Iran is the world's fourth largest oil producer, pumping nearly 5% of the world's oil in 2010. The threat of a major supply disruption from the country has helped support oil prices in recent weeks.

Ongoing concerns over the euro zone’s sovereign debt crisis limited gains after the European Central Bank allotted EUR489 billion to 523 European banks in its first offer of unlimited three-year loans.

The move failed to alleviate concerns over the financial crisis in the region as the scale of the operation indicated that European lenders believe that funding shortages were likely to continue into 2012.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery eased up 0.1% to trade at USD107.81 a barrel, with the spread between the Brent and crude contracts standing at USD8.72 a barrel.

The gap between the two contracts has narrowed significantly since hitting a record high USD27.88 a barrel in early October, as expectations for the return of Libyan crude supplies and fears over the deepening debt crisis in the euro zone have weighed on the Brent contract.


Crude oil tops USD99 after largest U.S. supply drop since 2001
 

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Comments (2)
CRAIG HARRIS
CRAIG HARRIS Feb 14, 2021 11:09PM ET
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Why is this old news here?
Mark Maxwell
MaxAnalysis May 28, 2020 10:57PM ET
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this was price manipulation at its finest
 
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