Crude prices slip on the last day of the year

Crude gains more than 8% on a yearly basis

Crude prices ended lower on Friday, 30 December 2011 at Nymex. Tensions in the Middle East, mainly Iran and latest developments at Europe impacted prices. Traders kept an eye on Iran where state news agency were saying that oil flow will stop from Strait of Hormuz if its sanction issues by European Union over nuclear programme continued. But crude registered modest yearly gains.

Light and sweet crude for February delivery fell $0.82 (0.8%) to $98.83 a barrel on the New York Mercantile Exchange on Friday. For the year, crude futures gained 8.2% after climbing 25% for the quarter. They were trading below $80 at the end of September and closed out 2010 at $91.38 a barrel.



Ahead of Friday's opening bell, Spain's new government unveiled austerity measures and said it expects a 2011 budget gap of nearly 8%. Investors drew limited cheer from reassurances made by German Finance Minister Wolfgang Schaeuble, who ruled out a breakup of the euro region in an interview published Friday.

In the currency market on Friday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies fell by almost 0.14%. For the year, the dollar index gained 1.6%.

In the weekly inventory report, The Energy Information Administration reported early Thursday an unexpected increase of 3.9 million barrels in U.S. supplies for the week ended 23 December 2011. The report also showed that motor gasoline supplies fell 700,000 barrels, but distillate stocks increased by 1.2 million barrels in the latest week. Market expected data to show that crude-oil stocks fell by 2.3 million barrels. They had also forecast a fall of 500,000 barrels in gasoline supplies and a decline of 1.2 million barrels in distillate inventories.

Among other energy products on Friday, January gasoline closed at $2.69 a gallon, up less than 1 cent, or 0.2%. January heating oil rose 1.8 cents, or 0.6%, to end at $2.94 a gallon. The January contracts expired at the close of Friday's trading session. February heating oil lost less than 1 cent, or 0.2%, to $2.91 and February gasoline fell 1 cent, or 0.5%, to $2.66. For the year, futures prices for heating oil added 16% and gasoline futures climbed 11% for the year.

Natural gas prices fell, extending a 3% loss in the previous session after Thursday's report from the Energy Information Administration showed that supplies of the fuel fell less than expected last week. February natural gas fell 3.8 cents, or 1.3%, to end at $2.99 per million British thermal units on Friday. Futures prices for the fuel lost a whopping 32% for the year.

The exchange will be closed for the New Year holiday on Monday, 02 January 2012.