Crude Stays Atop $71: Oil Alert

NEW YORK (TheStreet) -- Competing influences moved oil futures to-and-fro on Friday before the front-month contract on the New York Mercantile Exchange settled largely flat for the day.

Benchmark crude for November delivery added just 8 cents to $71.77 per barrel. Still, the contract has gained 2.6% since last Friday's $69.95 settlement price.

On Friday, the dollar rose against a smattering of currencies, which weighed on crude prices. The move stemmed from comments made by Federal Reserve Chairman Ben Bernanke, who on late Thursday raised the specter that Fed policy will need tightening once economic recovery takes hold. A weaker dollar on Thursday propelled a rally in oil futures, with the front-month gaining $2.12.

But equity markets rose on Friday, buoyed by economic optimism. Earlier in the day, the Commerce Department said the U.S. trade deficit shrank in surprising fashion to $30.7 billion in August. Observers had forecast the deficit to grow to $33 billion from the previous month's $31.9 billion deficit.

The International Energy Agency also raised oil demand predictions for 2009 and 2010, revising previous estimates upwards by 200,000 barrels per day and 350,000 barrels per day, respectively.

Among the major oil companies, Chevron(CBX) shares had the best showing, adding $1.31, or 1.8%, to close at $72.76. On Thursday, the San Ramon, Calif.-based integrated concern gave a third-quarter preview, saying in a press release that it expects $400 million in gains related to asset sales and tax items, while also forecasting flat results in downstream operations.

Hess(HES) shares, too, were bid higher, gaining 95 cents to finish at $57.41. Exxon Mobil(XOM) added 22 cents to close at $69.27.