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Light oil prices trading lower as US reserves grow
Published on December 3, 2009 by oilprices · No CommentsLight oil prices ended Wednesday trading lower as more evidence stacks up that the US is using less energy while oil reserves continue to grow.
“Once the holiday was over, people got right back to their cocooning habits, stayed home and didn’t do a lot of driving,” said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.
Benchmark crude oil futures for January delivery dropped $1.77, or more than 2 percent, to settle at $76.60 a barrel on the NYMEX.
The Energy Information Administration reported Wednesday that oil supplies grew last week, a surprise to most analysts, and that the amount of gasoline in storage surged by 4 million barrels. The reason is that refineries, which turn crude in to fuel, are cutting back on production with fewer consumers and businesses buying it. The EIA reported refineries had slowed operations dramatically, running at less than 80 percent capacity for only the second week this year.
Meanwhile, a private report showed the economy shed more jobs last month than expected. The ADP National Employment Report said 169,000 private sector jobs were lost in November. That’s less than October but worse than what was expected by economists polled by Thomson Reuters.
“Oil is in a range. It will stay there for the rest of the year, and probably through the first quarter of 2010, unless we see something geopolitical come from left field, maybe from Iran,” said Peter McGuire, managing director of CWA Global Markets.