U.S. crude oil futures ended a shortened session higher on Friday, rallying late amid short covering ahead of a long holiday weekend and as January products contracts expired.
Trading was affected by book squaring at the close of the year and prices during the day briefly slipped below $60 for the first time since November.
"The late rally was due to concern about trading being shut for three days and a fourth day of limited trading," said Bill O'Grady, assistant director of market analysis at A.G. Edwards. "There also was concern about possible reaction to Saddam Hussein's execution."
Saddam Hussein could be hanged within hours, a senior Iraqi source told Reuters on Friday after Saddam's lawyer said U.S. forces had handed over the former president to Iraqi
authorities for execution.
On the New York Mercantile Exchange, February crude rose 52 cents, or 0.86%, to settle at $61.05 per barrel, trading from $59.90 to $61.20.
The settlement was a penny above the final settlement price in 2005. Friday's trip below $60 was the first for front-month crude since Nov. 27, when the day's low was $59.26.
In London, ICE February Brent crude rose 19 cents to settle at $60.86 per barrel, trading from $60.04 to $61.13.
NYMEX energy trading shut early Friday ahead of the long holiday weekend. The exchange will be closed Monday for the New Year's Day holiday and the trading floor will remain shut Tuesday to honor the memory of former President Gerald Ford.
Electronic trading of all NYMEX and COMEX Division products through CME Globex will be available to energy and metals customers from 6:00 p.m. New York time Monday until 5:15 p.m. Tuesday, the NYMEX said.
Relatively mild weather, especially in the heating oil consuming Northeast, has helped temper crude oil prices even as fog hampered crude offloading in the Gulf of Mexico and OPEC's November production cut begins to show up in the market.
Heating demand in the U.S. Northeast was forecast to average near to below normal for the next five days, with the six-to-10-day forecast for temperatures to average above normal, private forecaster DTN Meteorlogix said on Friday.
Expiring NYMEX January heating oil fell 2.52 cents, or 1.55%, to settle at $1.5979 a gallon. February heating oil fell 0.79 cent to settle at $1.6482.
Helped by the moderate weather, U.S. natural gas storage fell an anemic 46 billion cubic feet last week, according to Friday's report from the Energy Information Administration. That was below the 66 bcf draw analysts expected.
Expiring January RBOB rose 0.41 cent, or 0.26%, to settle at $1.6021 per gallon. February RBOB rose 1.80 cents to settle at $1.6163.
At the expiration of its final NYMEX contract, January gasoline fell 4.02 cents, or 2.54%, to settle at $1.5219 per gallon. January is the last unleaded gasoline contract on the NYMEX board.
On Thursday the EIA reported that, in the week ending Dec. 22, U.S. crude stocks fell 8.1 million barrels. Analysts polled by Reuters had expected a decline of only 1.8 million barrels.
The crude slide was expected to correct now that tankers are moving along the previously fog-shrouded Gulf Coast, especially on the Houston Ship Channel, which had intermittent delays for a week.
Distillate stocks gained 500,000 barrels, just above the 400,000-barrel rise analysts expected. Gasoline supplies jumped 3.0 million barrels, well above the 700,000 barrels expected.
TECHNICALS
NYMEX January crude briefly fell below $60 support in electronic trading. Resistance was charted at $62.
Heating oil's support, charted at $1.65, was also briefly violated; resistance lies at $1.65. RBOB's support remains intact at $1.55 with resistance pegged at $1.65. Gasoline's support lies at $1.50, with resistance at $1.60.