Crude oil prices were steady above $97 US a barrel Thursday after failing to break above $100 overnight as a U.S. weekly inventory report showed crude oil stocks rose at a key oil terminal.
Trading volume was thin as the United States celebrated Thanksgiving Day. New York floor trading will be closed Thursday and will close early Friday. Electronic trading will not be affected.
The rise in supplies at Cushing, Okla., the delivery point for oil contracts bought on the New York Mercantile Exchange, offset the impact from an unexpected drop in the overall stockpiles. Falling supplies at the terminal are seen as a symptom of a tight market, and the gain in Cushing eased those concerns.
Caution ahead of a holiday break also may have taken some of the heat out of prices.
"Partly the reason we saw oil prices a little softer last night was that people were maybe reluctant to take a long position ahead of the Thanksgiving holiday," said David Moore, a commodity strategist at the Commonwealth Bank of Australia in Sydney. Long positions are bets that prices will rise.
Light sweet crude for January delivery dipped two cents to $97.27 a barrel in electronic trading on the New York Mercantile Exchange.
On Wednesday, the contract fell 74 cents to settle at $97.29 a barrel during the New York floor session, retreating from an intraday record of $99.29 a barrel touched during electronic trading earlier in the day.
A swoon in global stock markets also depressed oil prices Wednesday. Energy investors worry that falling equities are a symptom of weakening economies that would use less oil and gasoline.
Oil inventories fell 1.1 million barrels last week, according to the Energy Department's Energy Information Agency. Analysts in a survey had forecast, on average, an increase of 700,000 barrels. Cushing inventories, though, rose 1.2 million barrels, their first substantial increase in weeks, and the largest since the end of August.
"I wouldn't be surprised if we saw [oil prices] creep higher in the near term, just as people have another look over the U.S. EIA data and think about how tight the oil market is," said Moore.
The EIA reported that U.S. refinery activity fell last week, countering expectations for a slight increase. Gasoline inventories grew less than expected, but distillate supplies fell by 2.4 million barrels, far more than expected.
The decline in overall crude supplies can be explained in part by imports, which fell by an average of 667,000 barrels a day, or about six per cent, last week. Gasoline imports rose 11 per cent.
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