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Crude oil futures fall, reversing earlier gains on US economy concerns

Crude oil futures fall, reversing earlier gains on US economy concerns

Crude oil futures fell Friday, reversing earlier gains after weak figures on new home sales ignited fresh concerns about the U.S. economy and gave traders a green light to lock in profits from oil's recent rally.
Light, sweet crude for February delivery fell 62 cents to settle at $96 a barrel on the New York Mercantile Exchange. Despite Friday's swoon, oil prices have risen 5 percent in a little more than a week.
Gasoline futures for January delivery rose to a new trading record of $2.5175 a gallon Friday before retreating to settle down 3.65 cents at $2.4597 a gallon on the Nymex.
Gasoline futures have been pushed to new records in recent days, in part by the Goldman Sachs Commodity Index's plan to boost its gasoline futures holdings next month. The $90 billion (euro61.26 billion) commodities fund, which is administered by Standard & Poor's, will boost its gasoline futures holdings by about $3 billion (euro2.04 billion), from 1.37 percent to 4.55 percent of the fund, Kloza said.
In late November, oil threatened to rise to $100 a barrel but has retreated since as supplies appeared to be growing and demand seemed to be falling. But over the past several weeks, inventories have fallen domestically while demand has remained strong.
Meanwhile, concerns about supply disruptions from the oil-rich Middle East have been fueled by Turkish attacks on Kurdish forces in northern Iraq and by Thursday's assassination of Pakistani opposition leader Benazir Bhutto.
While Pakistan is not a major oil producer, it is a key player in regional politics and President George W. Bush's war on terrorism. Bhutto's assassination "adds another level of uncertainty to the outlook for the region," said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney.
But analysts believe the impact of the Bhutto assassination is fading. Meanwhile, several observers have raised concerns about Thursday's Energy Information Administration oil inventory report that showed inventories fell sharply last week.
Phil Flynn, an analyst at Alaron Trading Corp. in Chicago, noted that several aspects of the EIA report don't add up, including the fact that imports jumped while overall inventories fell. It is possible that late reporting caused some vital inventory data to be missed in this week's report, meaning it could show up next week. Companies have an incentive to minimize oil inventories for year-end tax purposes, Flynn said.
"To me, there's a lot of oil that seems to be unaccounted for," Flynn said.
Other energy futures were mixed Friday. January heating oil futures fell 4.33 cents to settle at $2.637 a gallon on the Nymex, but February natural gas futures rose 18.6 cents to settle at $7.386 per 1,000 cubic feet. Natural gas supplies fell slightly more than expected last week.
In London, February Brent crude fell 90 cents to settle at $93.88 a barrel on the ICE Futures exchange.


Updated : 2020-12-02 12:43 GMT+08:00