Oil backs off 5-week high near $79
London, December 29, 2009
Oil traded flat at below $79 a barrel, off a five-week high the previous session, as a firming dollar offset colder US weather and concerns over political developments in Iran.
US crude for February delivery rose 13 cents to $78.90 a barrel by 1049 GMT in thin intra-holiday trade. It settled up 72 cents on Monday, after touching $79.12, the highest since Nov. 23.
London Brent crude for February was up 20 cents at $77.52.
"Colder weather in North America, geopolitical concerns over Iran as well as expectations of further crude stockdraws remain, and we expect more market activity today as some people return from their holidays," said Alexandra Kogelnig at JBC Energy.
The dollar held firm near a two-month high against the yen on the view that the US economy is recovering well. Oil has often eased this year as the dollar firms, making crude more costly for holders of other currencies.
Iran arrested at least 10 leading opposition figures on Monday, a day after eight people were killed in anti-government protests that erupted during a Shi'ite Muslim religious festival, an opposition website said.
A Reuters poll of analysts showed US crude inventories likely fell 1.5 million barrels last week as refiners drew down stocks for year-end tax issues and imports fell for what would be the fourth straight week of declines.
Energy Information Administration data last week showed crude stocks fell a hefty 4.9 million barrels, following a slide of more than 3 million barrels in the previous two government reports.
Temperatures in the US Northeast -- the world's largest heating oil market -- were expected to average below normal through Friday, private forecaster DTN Meteorlogix said. – Reuters