Oil futures fell today as investors, expecting an ongoing price slide, sold to lock in profits from the previous session's big gains.
Crude prices spiked 5 percent on Wednesday, but two causes of that swing evaporated Thursday when the dollar strengthened and Exxon Mobil Corp. said a Texas refinery suffered no production outages from a fire.
Many analysts argued that Wednesday's gains weren't justified by any fundamental news, including a government report that inventories fell last week.
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"We were just overcooked yesterday," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill.
Indeed, an increase in oil supplies at the New York Mercantile Exchange delivery terminal in Cushing, Okla., has pushed the price of January crude below the price of February crude, the first time since August that the price of a front-month contract has fallen below that of a later contract. That price relationship is seen as an indication that oil supplies are rising, and that prices will fall.
Light, sweet crude for January delivery fell $2.14 to settle at $92.25 a barrel on the New York Mercantile Exchange. February crude fell $1.82 to settle at $92.46 a barrel. On Wednesday, January crude prices jumped $4.37 to their highest close since Nov. 27.
A firming of the dollar Thursday neutralized one of the reasons many analysts have cited for oil's run last month to $99 a barrel. Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.
At the pump, meanwhile, gas prices fell further below $3 a gallon, sliding 0.5 cent overnight to a national average of $2.985 a gallon, according to AAA and the Oil Price Information Service. Gas prices have fallen nearly 13 cents in a little less than a month since rising as oil threatened to hit $100 a barrel.
Other energy futures also fell Thursday. January heating oil fell 2.85 cents to $2.6147 a gallon, and January gasoline fell 3.84 cents to $2.3744 a gallon. January natural gas futures fell 21.5 cents to $7.193 per 1,000 cubic feet as investors shrugged off a government report that inventories fell by 146 billion cubic feet last week, slightly more than expected by analysts surveyed by Dow Jones Newswires.
In London, January Brent crude fell $1.90 to $92.12 a barrel on the ICE Futures exchange.
Via: Associated Press
