Crude oil rose more than $2 a barrel in New York after a U.S. government report showed consumer spending gained the most in more than two years, signaling economic growth and oil demand may be stronger than expected.
``Energy prices got a shot in the arm when consumer spending showed a much brisker pace that what people were looking for,'' said James Cordier, founder of Liberty Trading Group's OptionSellers.com in Tampa. ``That would add strength to the idea that demand could still be strong.''
``Energy prices got a shot in the arm when consumer spending showed a much brisker pace that what people were looking for,'' said James Cordier, founder of Liberty Trading Group's OptionSellers.com in Tampa. ``That would add strength to the idea that demand could still be strong.''
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The Commerce Department report comes as oil heads for its biggest annual gain in five years. The 1.1 percent jump in consumer sales last month may reduce the possibility that the economy will contract this quarter. Oil has fallen 6 percent from a record $99.29 on Nov. 21, on concern demand may decline as economic growth slowed.
Crude oil for February delivery rose $2.25, or 2.5 percent, to settle at $93.31 a barrel at 2:50 p.m. on the New York Mercantile Exchange, the highest close since Dec. 12. Prices have risen 53 percent this year.
About 308,000 contracts were traded yesterday, less than half the number from a week earlier. Declining volume sometimes magnifies changes in commodity prices.
``We are just looking for trading volume,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. ``It's been very quiet the last few days.''
Gasoline futures for January delivery rose 5.19 cents, or 2.2 percent, to $2.3795 a gallon in New York, the highest since Dec. 12.
Declining Deliveries
Daily deliveries of crude oil from the Organization of Petroleum Exporting Countries, responsible for 40 percent of world supplies, will decline 0.4 percent to 24.33 million barrels a day in the four weeks to Jan. 5, the first decline in OPEC shipments since August, consultant Oil Movements predicted.
OPEC resisted U.S. calls at its last meeting to pump additional barrels.
``OPEC is going to continue to keep a tight rein on crude supply,'' said Mike Wittner, head of oil research at Societe Generale in London. ``If the winter's normal and we see a more balanced market, you could well see OPEC cutting production at its next meeting.''
Brent crude for February settlement rose $1.58, or 1.7 percent, to $92.46 a barrel on London's ICE Futures Europe exchange.
Crude oil may hover between $90 and $92 a barrel in New York next week as a slowing economy curbs fuel consumption and U.S. inventories decline.
Fifteen of 32 analysts surveyed by Bloomberg News, or 47 percent, said oil prices will be little changed through Dec. 28. Twelve, or 38 percent, said prices would decline and five forecast they would increase. Last week, 52 percent of respondents said oil prices would drop.
$85 Oil
Bets that February crude oil will fall below $85 a barrel were the most actively traded options contracts on the Nymex today. The put contracts, which represent the right to sell oil at that price, fell 25 cents to 39 cents, or $390 per contract, according to data compiled by Bloomberg. One options contract is for 1,000 barrels of oil.
Crude oil for February delivery rose $2.25, or 2.5 percent, to settle at $93.31 a barrel at 2:50 p.m. on the New York Mercantile Exchange, the highest close since Dec. 12. Prices have risen 53 percent this year.
About 308,000 contracts were traded yesterday, less than half the number from a week earlier. Declining volume sometimes magnifies changes in commodity prices.
``We are just looking for trading volume,'' said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. ``It's been very quiet the last few days.''
Gasoline futures for January delivery rose 5.19 cents, or 2.2 percent, to $2.3795 a gallon in New York, the highest since Dec. 12.
Declining Deliveries
Daily deliveries of crude oil from the Organization of Petroleum Exporting Countries, responsible for 40 percent of world supplies, will decline 0.4 percent to 24.33 million barrels a day in the four weeks to Jan. 5, the first decline in OPEC shipments since August, consultant Oil Movements predicted.
OPEC resisted U.S. calls at its last meeting to pump additional barrels.
``OPEC is going to continue to keep a tight rein on crude supply,'' said Mike Wittner, head of oil research at Societe Generale in London. ``If the winter's normal and we see a more balanced market, you could well see OPEC cutting production at its next meeting.''
Brent crude for February settlement rose $1.58, or 1.7 percent, to $92.46 a barrel on London's ICE Futures Europe exchange.
Crude oil may hover between $90 and $92 a barrel in New York next week as a slowing economy curbs fuel consumption and U.S. inventories decline.
Fifteen of 32 analysts surveyed by Bloomberg News, or 47 percent, said oil prices will be little changed through Dec. 28. Twelve, or 38 percent, said prices would decline and five forecast they would increase. Last week, 52 percent of respondents said oil prices would drop.
$85 Oil
Bets that February crude oil will fall below $85 a barrel were the most actively traded options contracts on the Nymex today. The put contracts, which represent the right to sell oil at that price, fell 25 cents to 39 cents, or $390 per contract, according to data compiled by Bloomberg. One options contract is for 1,000 barrels of oil.
Via: Bloomberg|by Robert Tuttle
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