Crude prices end modestly lower

Prices shed close to 6% on a weekly basis

Crude prices ended modestly lower on Friday, 16 December 2011 at Nymex. Prices fell as US stocks pared almost all their gains and ended in a mixed mode at the end with the Dow ending in the red while going into close.

Light and sweet crude for January delivery fell $0.34 (0.4%) to $93.43 a barrel on the New York Mercantile Exchange on Friday. Oil traded as low as $92.52 and as high as $94.79 a barrel during the day. For the week, crude lost 5.9%. For the month of November, oil futures gained 7.7%.



In the currency market on Friday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies scaled back some of its gains after a better-than-expected result for a Spanish debt auction, and better-than-expected U.S. jobless claims data on Thursday. The dollar index climbed 0.03% later during the day after stocks dropped. The dollar rose to 11 month high mainly against the euro earlier during the week.

The stock market bid higher in the early going on Friday, but for the second straight session its failure to overcome resistance resulted in selling that left the major averages to finish the week in relatively mixed fashion. Stocks benefited earlier from strong buying on above-average volume, which was inflated by quadruple witching options expiration.

But Dow pared all its gains after Fitch Ratings affirmed France's top Triple-A credit rating, but warned of a potential down grade for six other euro-using nations, placing Belgium, Spain, Slovenia, Italy, Ireland and Cyprus under review, calling a broad solution to Europe's debt crisis “technically and politically beyond reach.”

Among economic data for the day, the Labor Department said on Friday that the consumer price index was flat last month on a seasonally adjusted basis, matching the forecast. Core prices that don't take food and energy into account climbed 0.2%

In the latest weekly inventory report, the EIA announced earlier during the week a decline of 1.9 million barrels in U.S. crude supplies for the week ended 9 December 2011. Motor gasoline supplies rose 3.8 million barrels, while distillate stocks fell 500,000 barrels in the latest week. Market had expected a decrease of 2 million barrels for crude supplies, a rise of 2 million for gasoline and an increase of 500,000 barrels for distillates.

At a meeting in Vienna earlier on Wednesday, the Organization of the Petroleum Exporting Countries said members will maintain their current, total production of 30 million barrels per day, including production from Libya, which has been ramping up to pre-civil-war levels.

Earlier during the week, in its latest monthly oil report, trimmed its forecast for global oil demand for 2011 and 2012 by 160,000 barrels a day and 200,000 barrels a day, respectively, citing a “more precarious economic backdrop.” The agency now expects global oil demand to average 89.0 million barrels a day in 2011 and 90.3 million barrels a day in 2012. The IEA also forecast Iranian production capacity to decline by 890,000 barrels a day to just under 3 million barrels a day by 2016, due to tighter sanctions.

Among other energy products on Friday, January gasoline declined less than 1 cent, or 0.1%, to $2.49 per gallon. Heating oil for the same month's delivery lost 2 cents, or 0.8%, to $2.80 a gallon. Gasoline ended the week down 4.3% and heating oil declined 3.8%.