NYMEX Oil Futures Close Mixed; December Crude Expires DN
CRANBURY, N.J. (DTN) -- New York Mercantile Exchange oil futures closed
Friday's session mixed while posting gains on the week, with the afternoon
expiration of the December crude futures contract failing to generate fireworks
during its last day on the board. The trio of contracts all posted one-week
lows during Friday's session, with December RBOB futures pushing to a gain by
the closing bell. December heating oil was the day's loss leader.
Late week macroeconomic data dislodged overenthusiastic sentiment that the
U.S. economy was poised for a robust recovery, with the prospect of a sharp
increase in foreclosures coupled with high unemployment forcing a rethink on
the pace of economic expansion. Since consumer spending is a pillar of economic
growth for the U.S., the data is daunting, suggesting fuel demand will remain
tepid.
All the data out this week wasn't negative however, with signs of inflation
not yet emerging. Also, the index of leading economic indicators rose 0.3
percent in October, making it the seventh month with an increase, and is up 6
percent since March. The surge in the index signals that the U.S. economy has
exited the recession and is expanding.
U.S. stock indices are headed for a lower close on Friday, but this follows
the Dow Jones Industrial Average reaching a 2009 high earlier in the week.
Critics say, however, that corporate cost cutting and low interbank overnight
borrowing rates that are near zero are fueling the rally, suggesting the upside
surge doesn't have durability.
The U.S. dollar also strengthened today, pressuring crude prices. The
greenback had posted a 15-month low on Tuesday.
On fundamentals, surplus inventory levels and tepid fuel demand continue to
pressure the complex, with above normal temperatures in the Northeast and
Midwest limiting demand for winter fuels. Today's announcement by Valero Energy
that it would permanently close its Delaware City refinery because of poor
economics, climbing costs and the failure to find a buyer on adequate terms
seemed to give a psychological boost to gasoline. The news followed a
larger-than-expected drawdown in gasoline supply for last week reported on
Wednesday, with RBOB futures reversing from morning losses to a gain today.
On the session, December crude futures expired down 74cts at $76.72 bbl,
bouncing off support near a $76.20 one-week low, but ended the week up 37cts.
January crude futures settled down 58cts at $77.51 bbl.
December heating oil futures settled 2.08cts lower at $1.9756 gal, paring
losses after sliding to a $1.9589 one-week low. On the week, the contract edged
up 0.95cts.
December RBOB futures bounced off a $1.9440 gal one-week low to post a
1.11cts gain with a $1.9806 gal settlement. The contract rallied 6.44cts on the
week.
Brian L. Milne, 1.609.371.3328, brian.milne@dtn.com, www.telventdtn.com. (c)
2009 Telvent DTN. All rights reserved.
