Oil Ends Year to the Upside

Light, sweet crude climbs by 52 cents to settle at $61.05 a barrel.
Author:
Publish date:

Oil futures jumped past $61 Friday on the last trading day of the year as the markets focused on plunging supplies and the apparently imminent execution of former Iraqi President Saddam Hussein.

Light, sweet crude climbed by 52 cents to settle at $61.05 a barrel in New York. The Nymex closed early in advance of a four-day holiday weekend that includes New Year's Day and a funeral service for former U.S. President Gerald Ford on Tuesday.

This week, volume has been light because many traders are either on vacation or don't want to make bets on the direction of oil prices before the end of the year.

The planned execution of Saddam Hussein, which could take place any day, also gave a boost to crude prices. Traders are concerned there may be attacks on Iraqi's oil industry in retaliation for his death.

Last week, stockpiles of crude tumbled by 8.1 million barrels, topping an estimate of a 2.5-million barrel decline from a

Bloomberg

poll of analysts. The drop was due largely to the near shutdown of three shipping channels in Texas and Louisiana over the past two weeks because of fog. Many large refineries are located there.

Refiners made more gasoline and distillates, boosting domestic stockpiles by 3 million barrels and 500,000 barrels, respectively. Capacity at the nation's refiners rose to 90.9% last week, up from 90.7% the previous week, according to the U.S. Department of Energy's release on Thursday.

Higher supplies pushed wholesale unleaded gasoline prices down by 4 cents to $1.54 a gallon.

Predictions of above-average temperatures for the Midwest and Northeast, the country's biggest markets for heating oil, dampened heating fuel prices. The National Weather Service, in a new 10-day outlook, expects mild temperatures to remain in those areas through Jan. 7. Heating oil slipped 2 cents to $1.59 a gallon.

Natural gas inched up 5 cents to $6.29 per million British thermal units as traders closed out positions before the new year.

Last week, natural gas inventories fell 46 billion cubic feet to 3.12 trillion cubic feet, the Energy Department reported in its weekly update. The report was delayed one day because of the closing of the federal government on Monday. Supplies are nearly 13% above the five-year average and 17% higher than last year at this time.

Energy shares were trading modestly lower on the Amex Oil and Philadelphia Oil Service indices, down as much as 0.8%.

Hess

(HES) - Get Report

,

Valero Energy

(VLO) - Get Report

and

Anadarko Petroleum

(APC) - Get Report

were falling the most, with losses as steep as 1.7%.

Exxon Mobil

(XOM) - Get Report

, the biggest publicly traded energy company, was down 0.4% at $77.03.

National Oilwell Varco

(NOV) - Get Report

,

Nabors Industries

(NBR) - Get Report

and

Tidewater

(TDW) - Get Report

were posting the largest declines among oil service firms, down as much as 1.6%.