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Crude Oil Ends Slightly Lower; But Gains 2.4% For Week

12/28/2012 3:29 PM ET

U.S. crude oil ended slightly lower Friday, with investors continuing to track last-ditch efforts by President Obama and Congressional leaders to resolve the U.S. budget crisis to avert a fiscal cliff which is due in few days time. Crude oil pared gains after a U.S. Energy Information Administration weekly report showed U.S. oil stockpiles to have decreased last week, but less than expected. Nonetheless, oil prices gained 2.4 percent over the week.

Light Sweet Crude Oil futures for February delivery, the most actively traded contract, shed $0.07 or 0.08 percent to close at $90.80 a barrel on the New York Mercantile Exchange Friday.

Crude prices for February delivery scaled a high of $91.49 a barrel intraday and a low of $90.32.

Yesterday, oil settled marginally lower on increased fears over the stalemate in the U.S. budget talks, with investors closely monitoring developments in the fiscal cliff negotiations.

The U.S. Energy Information Administration's weekly crude oil report showed U.S. commercial crude oil inventories to have decreased by 0.60 million barrels to 371.10 million barrels last week. The week before, crude oil inventories decreased 1.00 million barrels to 371.60 million barrels.

Total motor gasoline inventories jumped 3.80 million barrels last week, after increasing by 2.20 million barrels in the prior week. Analysts expected crude oil inventories to shed 1.90 million barrels and gasoline stocks to add 0.50 million barrels last week.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.70 on Friday, up from 79.69 in North American trade late Thursday. The dollar scaled a high of 79.93 intraday and a low of 79.59.

The euro traded lower against the dollar at $1.3221 on Friday, as compared to $1.3237 late Thursday in North America. The euro scaled a high of $1.3256 intraday and a low of $1.3168.

In economic news from the U.S., the National Association of Realtors said its pending home sales index rose 1.7 percent to 106.4 in November from a downwardly revised 104.6 in October. Economists had been expecting the index to increase by about 1.8 percent. With the increase, the pending home sales index rose to its highest level since coming in at 111.3 in April of 2010, when sales were boosted by a home buyer tax credit.

A report from the Institute for Supply Management showed Chicago-area business activity expanded for the second consecutive month in December, with the business barometer climbing to 51.6 from 50.4 in November. A reading above 50 indicates an increase in business activity. Economists expected the index to rise to 51.0. A notable turnaround by new orders contributed to the increase by the business barometer, with the new orders index jumping to 54.0 in December from 45.3 in November.

From the euro zone, French consumer spending recorded surprise improvement in November, data from the statistical office Insee showed. The overall consumer spending was up 0.2 percent month-on-month in November, after a revised 0.1 percent fall in the previous month. Economists expected spending to remain unchanged.

A separate report from the Insee showed that the French economy expanded only 0.1 percent in the third quarter from the prior quarter. The third quarter growth was downgraded from 0.2 percent and follows a 0.1 percent fall in the second quarter.

Among a slew of economic reports released from Japan, the consumer price inflation report showed that Japanese core consumer prices fell 0.1 percent year-over-year in November. Core consumer prices for Tokyo considered a leading indicator for Japan declined a steeper 0.5 percent.

by RTT Staff Writer

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