Crude remains steady for the week

Price firms up in the later part of the week as crude inventory drops to lowest level in almost three years

Crude-oil future prices for sweet light crude for February delivery ended the week almost unchanged. Though prices witnessed some volatile trading during the week, and also witnessed the shift from January contract to February contract.

For the week ending Friday, 21 December, 2007, crude-oil futures for light sweet crude for February delivery closed at $93.31/barrel (higher by $2.25/barrel or 2.5%) on the New York Mercantile Exchange. Futures rose as high as $93.84 earlier in the day. Prices are 53% higher than the year before.

Prices slipped earlier in the week as Turkish troops began to withdraw from Iraq. Price also fell on speculation that warmer weather in the eastern U.S. will curb fuel use.

Then prices once again firmed up as Energy Department reported more than expected slump in crude inventories for the week ended 14 December. The drop took the inventory level to lowest level in almost three years.

As per the weekly inventory report by the Energy Department on Wednesday, 19 December, U.S. crude inventories fell by 7.6 million barrels to 296.9 million barrels in the week ending 14 December, the lowest since February 2005. That was the fifth straight week of drop. U.S. refineries operated at 87.8% of their operable capacity last week, down 1% from the previous week's 88.8%.

As per EIA, at 296.9 million barrels, U.S. crude inventories were in the lower half of the average range for this time of year and at lowest level since February, 2005. U.S. crude-oil imports averaged 9.1 million barrels per day last week, down 952,000 barrels per day from the previous week.