Oil Flat on US Economic Concerns

By GEORGE JAHN

VIENNA, Austria – Oil prices were flat Monday on the final trading day of the year, after a decline in the previous session on concerns about the U.S. economy.

Light, sweet crude for February delivery traded down one cent at $95.99 a barrel in electronic trading on the New York Mercantile Exchange in the early afternoon European time.

The contract fell 62 cents to settle at $96 a barrel Friday after a report showed weak figures on new home sales in the United States. The data again raised fears about a possible economic slowdown in the world’s largest consumer of oil products.

On the ICE Futures exchange in London, February Brent crude was selling Monday for $94.30 a barrel, up 42 cents.

Oil prices remain supported, though, by concerns about supply disruptions from the oil-rich Middle East. As well, Vienna’s PVM Oil Associates noted that “falling inventories in the U.S. may have affected prices in a bullish way.”

Turkish jets hit suspected Kurdish rebel shelters in northern Iraq for a third time on Dec. 26. Turkey has also launched a cross-border raid and fired artillery at Kurdish rebel positions since the first airstrike on Dec. 16. The rebels have vowed to take the group’s battle for autonomy deep inside Turkey if the cross-border airstrikes do not stop.

Tension in the Middle East usually brings worries that oil shipments from the region will be reduced or halted.

In late November, oil threatened to rise to $100 a barrel. It has since retreated as supplies appeared to be growing and demand seemed to be falling. But over the past several weeks, inventories have fallen in the U.S. while demand has remained strong.

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. Nymex gasoline futures were up by over a penny Monday, fetching US2.4776 a gallon (3.8 liters).

The $90 billion (61 billion euros) fund, administered by Standard & Poor’s, will boost its gasoline futures holdings by about $3 billion (2 billion euros), according to Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service. That would raise its percentage holding in gasoline futures to 4.55 percent of the fund from 1.37 percent.

In other Nymex trading Monday, heating oil futures rose nearly 2 cents to $2.6542 a gallon while natural gas prices dropped more than 9 cents to $7.295 per 1,000 cubic feet.