Investing.com - Crude oil futures ended Friday's session
modestly higher, bouncing off the lows after a U.S. government
report showed oil supplies fell significantly more-than-expected
Tepid U.S. non-farm payrolls data, which suggested the Federal
Reserve will continue its quantitative easing program in the near
term, provided further support.
On the New York Mercantile Exchange, light sweet crude futures for
delivery in February rose 0.2% Friday to settle the week at
USD93.08 a barrel by close of trade.
Prices rose to USD93.82 a barrel on Wednesday, the strongest level
since September 19, after U.S. lawmakers approved a deal to avoid
the fiscal cliff crisis.
On the week, New York-traded oil futures climbed 2.55%, the fourth
consecutive weekly gain and the biggest advance in nearly three
Oil prices turned higher after the U.S. Energy Information
Administration said that U.S. crude oil inventories fell by 11.1
million barrels last week, compared to expectations for a decline
of 0.9 million barrels.
The report also showed that total motor gasoline inventories
increased by 2.57 million barrels, above expectations for a gain of
1.95 million barrels.
The Energy Department released its weekly report two days later
than usual because of New Year's Day holiday.
The supply data came after the U.S. Department of Labor said the
economy added 155,000 jobs in December, easing from an upwardly
revised increase of 161,000 in November.
The unemployment rate held steady at 7.8%, suggesting that the
recovery in the labor market may be slowing.
The U.S. dollar moderated strong gains following the release of the
lackluster U.S. employment data, as the still-high unemployment
rate was likely to keep the Fed's bond-buying program in place for
the indefinite future.
The dollar index, which tracks the performance of the greenback
against a basket of six other major currencies, retreated from the
session high of 80.99 to settle the week at 80.61.
Oil prices often move inversely to the U.S. dollar, as the
dollar-priced commodity becomes less expensive for buyers using
New York-traded oil prices were down by more than 1% earlier in the
session after the minutes from the Federal Reserve's most recent
policy-setting meeting published late Thursday showed several Fed
officials thought the central bank would be able to slow or stop
its bond purchases well before December 2013.
The Fed's quantitative easing program is viewed by many investors
as a major source of liquidity that weakens the U.S. dollar and
helps support prices of commodities and other hard assets,
In the week ahead, investors are likely to remain focused on U.S.
political wrangling over fiscal policy.
U.S. lawmakers passed a compromise bill to avoid the fiscal cliff
last week, however investors remained jittery over the longer term
outlook, with negotiations on raising the U.S. debt ceiling still
to come in February.
Elsewhere, on the ICE Futures Exchange in London, Brent oil futures
for February delivery dropped 0.65% Friday to settle the week at
USD111.42 a barrel.
The London-traded Brent contract added 0.85% over the week, while
the spread between the Brent and the crude contracts stood at
USD18.34 a barrel.
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