Crude witnesses longest losing streak in six years

Prices continue to soften as dollar becomes strong

Crude prices extended its losing streak and ended lower for eighth straight day on Friday, 11 December, 2009. This was the longest losing streak for crude in almost six years. Prices rose earlier in the day due to the report from International Energy Agency, but then, prices pared all their gains. Economic data helped the dollar surge up and with that crude prices slipped.

On Friday, crude-oil futures for light sweet crude for January delivery closed at $69.87/barrel (lower by $0.67 or 0.9%). The contract has lost almost 11% in the past eight sessions. For the week, crude ended lower by 7.4%. Crude ended month of November, higher by 0.4%. In December, till now, crude has shed almost 9%.

Oil prices had reached a high of $147 on 11 July, 2008 but have dropped almost 58.2% since then.

Among economic data on Friday, The University of Michigan index showed that consumer sentiment improved markedly in early December. The consumer sentiment index rose to 73.4 in early December from 67.4 in November. Another report showed that the U.S. retail sales rose a better-than-expected 1.3% in November, the third increase in the past four months

In the currency market on Friday, the dollar shot up remarkably after the retail sales report. The dollar index, which weighs the strength of dollar against a basket of six other currencies rose by almost 0.8%.

On Friday, Paris-based IEA, hiked its forecast for 2010 global oil demand by 130,000 barrels a day to an average 86.3 million barrels a day. That represents an increase of 1.7%, or 1.5 million barrels a day, compared to 2009. The IEA also left its forecast for 2009 oil demand virtually unchanged at 84.9 million barrels a day, a decline of 1.6% year-on-year.

Last week, in the latest monthly report the EIA reported that it expects oil prices to average $76 a barrel this winter from October to March. The price target came just $1 lower than the previous month's forecast. The agency expects prices will dip to $75 early next year and will then rise to $82 a barrel by December 2010.

Among other energy products on Friday, January gasoline fell 2.22 cents, or 1.2% to $1.8351 a gallon. January heating oil added rose slightly to $1.9085 a gallon.

Also on Friday, January natural gas sank 13.5 cents, or 2.5%, to $5.163 per million British thermal units.

Crude prices had ended FY 2008 lower by 54%, the largest yearly loss since trading began at Nymex.