Light oil prices trading higher on US dollar, oil supply

Light crude oil prices pull back near €72 a barrel in trading on Thursday as the US dollar’s surge to a three month high against the euro outweighed a surprisingly large fall in US crude and distillate stockpiles. The dollar marched broadly higher as investors unwound short positions before the year-end, pulling crude back from the one-week peak above $73 hit the previous day.

Crude for January delivery fell 25 cents to $72.41 a barrel, after hitting a high of $73.13 a barrel earlier. It had settled up $1.97 a barrel at $72.66 yesterday.

US Light crude had risen for three days in a row following a nine-session rout, in which prices plummeted 11.3 per cent from levels above $78 a barrel. Analysts attributed the fall to persistently poor fuel demand and bloated US oil inventories. A report from the US Energy Information Administration yesterday showed crude inventories declined by 3.7 million barrels last week, eclipsing analyst forecasts for a more modest draw of 1.8 million barrels.

A further drawdown in distillate stockpiles could be on the cards, after a 10-day National Weather Service forecast earlier this week called for lower-than-normal temperatures in most of the eastern United States, the world’s biggest regional consumer of heating oil.

Tags:  light oil prices, trading, US dollar