Forexpros – Crude oil futures advanced slightly in light holiday trade despite U.S. supply increasing and Iranian fears easing.
On the New York Mercantile Exchange, light sweet crude futures for January settlement traded at USD99.66 a barrel during late U.S. trade, advancing 0.30%.
It earlier hit a daily high of USD99.91 a barrel.
Early strength in the U.S. dollar initially suppressed prices prior to the dollar’s pullback later in the session.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, gave back 0.03% to trade at 80.87.
Dollar weakness normally helps commodity prices, as it increases their appeal as an alternative asset and makes dollar priced commodities less expensive for holders of other currencies.
U.S. crude oil inventories increased by 3.9 million barrels in the week ended December 23, surprising analysts who projected a 2.5 million barrel decline.
Total U.S. crude oil inventories came in at 327.5 million barrels as of last week, staying in the upper limit of the average range for this time of year.
Pressure was increased on crude oil prices as concerns over the euro zone’s debt crisis increased after Italy’s Treasury sold EUR7 billion of long-term debt maturing between 2014 and 2022, missing the Treasuries maximum target of EUR8.5 billion.
On the Iranian supply front, fears were lessened as a senior Saudi oil official stated that Arab nations are prepared to make up for any supply loss should Iran disrupt the regions oil flow.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for February delivery added 0.33% to trade at USD107.92 a barrel, up USD8.28 on its U.S. Counterpart.
This nearly USD10.00 spread has been narrowing recently, but is still historically high. The two contracts traditionally trade within USD1.00 of each other.
Thin holiday trade added to the volatility.
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