Market Close: Dec 04 Down
Dec 4th, 2014 by loren
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Crude-oil futures on Thursday abandoned an attempt to build on a prior-session rebound, driven by support from a recent drop in U.S. oil stockpiles. On the New York Mercantile Exchange, light, sweet crude futures for delivery in January declined 57 cents, or 0.9%, to settle at $66.81 a barrel. Futures have been down six of the past eight sessions. January Brent crude on London’s ICE Futures exchange fell 28 cents, or 0.4%, to finish at $69.64 a barrel.
U.S. crude inventories for the week ended Nov. 28 fell by a surprise 3.7 million barrels, the U.S. Energy Information Administration data showed, while analysts had expected an increase in supplies. That gave crude prices a bump on Wednesday.
Saudi Arabia maintains the view that oil prices could stabilize at around $60 a barrel, indicating it won’t push for supply cuts in the near-term, The Wall Street Journal reported Wednesday. “As news hits the wires that Saudi expects prices to stabilize around $60, the prospect of this becoming a self-fulfilling prophesy is a nagging doubt at the back of the market’s mind,” said Matt Smith, an analyst with Schneider Electric. Saudi Arabia is expected to announce its official selling prices for January on Thursday or Friday, said analysts at Commerzbank. Most experts expect the largest OPEC producer to increase its discounts for Asian consumers as compared to international benchmark prices. “This would herald a new round in the battle for market shares, especially since benchmark prices such as Brent have fallen further since the recent OPEC meeting and are trading close to five-year lows,” said Commerzbank in a note.
Investors are watching out for other major oil producers to make supply or investment cuts. Some oil-related enterprises already are bracing for lower oil. Exxon’s CEO on Wednesday said the company could weather oil at $40 a barrel. Elsewhere in energy trading, Nymex gasoline for January fell a little over a penny, or 0.7%, to settle at $1.7948 a gallon. That was a fresh five-year low for gasoline futures. Read: Retail gasoline about to become even cheaper.