Oil Prices Mixed as Inventories Stay High

LONDON : Oil prices traded mixed on Friday and were likely to stay under 80 dollars amid high energy inventories in the United States, the world’s biggest energy-consuming nation.

New York’s main contract, light sweet crude for December delivery, dipped nine cents to 77.37 dollars a barrel after slumping by more than two dollars on Thursday.

Brent North Sea crude for January delivery rose 23 cents to 77.87 dollars in early London trading on Friday.

Prices diverged within a tight range “with relatively swollen US stockpiles still weighing on prices,” said VTB Capital commodities analyst Andrey Kryuchenkov in London.

New York crude prices on Wednesday breached 80 dollars a barrel after government data showed crude reserves in the United States fell 900,000 barrels in the week ending November 13.

However levels remain relatively high with demand struggling to recover following the financial crisis.

Oil prices slumped on Thursday as the dollar rose and owing to renewed doubts about a sustainable global economic recovery, traders said.

An array of largely unimpressive US economic data caused a fall on Wall Street as investors sought safety in the dollar, a traditional safe haven currency in times of distress.

A stronger greenback makes dollar-denominated commodities — like crude oil and gold — more expensive for buyers using other currencies. That tends to reduce demand for such raw materials, eventually weighing on prices.

Oil under 78 dollars a barrel was “a buying opportunity,” said analyst Victor Shum at the Purvin and Gertz energy consultancy in Singapore.

“The oil market has shown resistance against breaking through the 80-dollar level simply because the sustainability of economic recovery.”

They were also struggling to find support owing to strong supplies and weak demand, he added.