U.S. News

Oil Jumps Above $63


Crude oil futures ended stronger above $63 a barrel on Friday as fog hampered Gulf Coast tanker traffic a day after OPEC decided on another production cut and after this week's inventory data showed falling stockpiles.

Prices seesawed as mild U.S. weather hampered any heating oil futures jump and helped limit the strength of crude futures.

On the New York Mercantile Exchange, January crude rose after trading from $62.28 to $63.50. Friday's was the highest close since Dec. 1, when the settlement price also was $63.43.

In London, ICE February Brent crude rose after trading from $62.71 to $63.61.

"The OPEC cut is there, and the ship channel fog supports things a bit, though they usually can catch up pretty quickly," said John Kilduff, senior vice president for the Energy Risk
Management Group at Fimat USA. "The attack in Nigeria reminds everyone how tenuous the supply situation can be."

Fog, which shut the Houston Ship Channel early Thursday, kept the waterway between the city and the Gulf of Mexico closed for all but three hours Friday, and forecasts said the
fog would linger on and off for several days.

Fog also shut the Calcasieu Ship Channel that allows tanker access to refineries in Lake Charles, Louisiana.

The deepwater Louisiana Offshore Oil Port's tanker offloading was not affected by the fog and its operations were not expected to be curbed, a LOOP official said on Friday.

The Department of Energy said Friday that crude oil from the Strategic Petroleum Reserve was available, should the shipping problems cause a severe supply disruption.

A day after the Organization of Petroleum Exporting Countries agreed at a meeting in Nigeria to cut production by 500,000 barrels per day effective Feb. 1, gunmen invaded an oil field operated by Royal Dutch Shell and were holding several people hostage, the company said.

OPEC has continued to pump about 1 million bpd above its output target in December, said consultant Petrologistics.

The cartel decided in October to cut output by 1.2 million bpd to 26.3 million, effective Nov. 1, to halt a 10-week, 25% price decline.

But mild weather in the key heating oil consuming U.S. Northeast helped make Friday's trading choppy. Heating demand will average much below normal in the region the next five days, according to private forecaster DTN Meteorlogix.

NYMEX January heating oil finished well above its early $1.7590 low.

January RBOB and gasoline also posted solid gains to end the week.

The fresh OPEC cut and tanker delays came after Wednesday's government report showing U.S. crude inventories fell 4.3 million barrels in the week to Dec. 8. That was much more than analyst expectations, though supply remained 12.7 million barrels above the year-ago level.

Crude oil imports averaged 9.6 million bpd last week, down 701,000 bpd from the previous week.

U.S. distillate supply, including heating oil and diesel fuel, fell 500,000 barrels. Gasoline supply also fell, though only by 100,000 barrels. But analysts were expecting a gain of 1.2 million barrels.

NYMEX January crude resistance was charted at $64, above the Dec. 8 high of $63.65. Support remained charted at $60.50.

Heating oil's resistance was charted at $1.80. Support was at $1.73. The crack spread was at $11.52.

RBOB resistance at $1.70 was breached. Support was charted at $1.62. Gasoline resistance was slated at $1.70. Support was at $1.61. The crack spread was at $7.57.