Crude prices end marginally lower

Geo political tensions in Iran and Nigeria coupled with a strong dollar keep prices steady

Crude prices ended lower on Friday, 13 January 2012 at Nymex. Prices traded with a narrow range due to continuing geo political tensions in Iran and Nigeria coupled with a strong dollar.

Light and sweet crude for February delivery fell $0.40 (0.4%) to $98.7 a barrel on the New York Mercantile Exchange on Friday. Prices fell 2.8% for the week erasing all of last week's gain. For the year 2011, crude futures gained 8.2%.



In the currency market on Friday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.2%.

Tensions over Iran's nuclear intentions and recent military drills in the Strait of Hormuz had pushed oil back above $100 in the past month. In addition, protests by union workers in Nigeria over the government's plan to end fuel subsidies were reportedly suspended as discussions between the two sides continued. However, a nationwide strike was still in effect. Nigeria is Africa's largest oil producer, with exports going largely to the U.S. and Europe.

Driving up the dollar and weighing on U.S. and European stocks and the broader commodities market, were news reports said ratings agency Standard & Poor's was set to announce later Friday that it had cut France's triple-A rating. The French finance minister reportedly confirmed that France has lost the blue-chip rating.

US data at Wall Street on Friday showed that the U.S. trade deficit widened by 10.4% in November, the largest gap since June and the biggest jump in the deficit since May. The deficit figure of $47.8 billion was well above $44.8 billion consensus forecast.

The EIA reported earlier during the week in its weekly inventory report on crude and crude stockpiles that there was an unexpected increase in the U.S. crude supply by 5 million barrels during the week ended 6 January 2011. Market had expected a drop of 1 million barrels during the week. Gasoline inventories rose by 3.6 million barrels on the week, compared to expectations of an increase of 1.8 million barrels. Distillate stocks, which include heating oil, were up 4 million barrels. Market had expected an increase of 1.4 million barrels. The Energy Information Administration had also reported that refineries operated at 85.6% of their capacity. Market had expected an increase to 85.2%.

Among other energy products on Friday, February gasoline turned higher, edging up to $2.734 a gallon from $2.731 a gallon. The February contract for heating oil fell, off 0.7% to $3.03 a gallon.

Natural gas for February delivery fell 1.1% to $2.68 per million British thermal units on Friday.