Crude drops for first time in four sessions

Prices slip as IEA cuts its global oil demand forecast

Crude prices ended lower on Friday, 10 February 2012 at Nymex. Prices ended lower for first time in four sessions as the dollar headed up and International Energy Agency cut its 2012 estimate for global oil demand.

Light and sweet crude for March delivery fell $1.17 (1.2%) to $98.67 a barrel on the New York Mercantile Exchange on Friday. Prices rose 0.8% for the week. Prices fell 0.4% for the month of January.



In the currency market on Friday, the Dollar Index, which weighs the strength of dollar against basket of six other currencies rose by almost 0.58%.

Earlier Friday, the IEA cut its 2012 estimate for global oil demand to 800,000 barrels a day, versus a prior forecast of 1.1 million barrels a day, citing lower global growth projections. It noted global GDP growth is now forecast at 3.3% for 2012, from the 4% level assumed since September.

Doubts surfaced on Friday about the deal Greece struck with political parties as European finance ministers demanded a vote on the agreed-upon austerity measures before shipping off any more financial aid to Athens.

Among economic data expected for the day at Wall Street, The Commerce Department in US reported that trade deficit widened in December to a six-month high, as the pickup in the U.S. economy attracted more imported goods. The nation's trade deficit expanded 3.7% in the final month of 2011, to $48.8 billion, the largest since June from a revised $47.1 billion in November.

Another report showed that consumers turned more pessimistic in December, however. A preliminary report from the University of Michigan/Thomson Reuters showed a decline in consumer sentiment to 72.5 in February from a final reading of 75 in January.

In the latest weekly inventory report, the EIA reported earlier during the week an increase of 300,000 barrels in crude supplies for the week ended 3 February 2012. That contrasted with expectations of an increase of 2.25 million barrels. The EIA also said gasoline supplies increased 1.6 million barrels on the week, with an increase in distillates, which include heating oil, pegged at 1.2 million barrels. Market had expected gasoline inventories to have risen by 1.25 million barrels and distillates to have declined 200,000 barrels.

Among other traded energy products on Friday, March gasoline declined 4 cents, or 1.3%, to $2.97 a gallon. On the week, however, gasoline gained 2.1%. March heating oil fell 3 cents, or 0.8%, to $3.18 a gallon. Weekly gains reached 2.2%.

March natural-gas futures settled unchanged at $2.48 per million British thermal units. Weekly losses reached 0.8%.