Oil briefly tops $100 a barrel as U.S. stockpiles drop
NEW YORK (Reuters) — Oil fell Thursday as traders took profits from a record rally that had pushed oil to $100 a barrel two days in a row — a level that has raised a red flag over global economic growth.
Crude oil for delivery in February hit $100.09 on the New York Mercantile Exchange before falling back. U.S. crude settled down 44 cents to $99.18 a barrel.
The recent surge in oil prices has darkened the economic outlook in the United States, already battered by a housing crisis and credit crunch, and could threaten growth in big European energy-consuming nations.
Crude oil briefly hit $100 exactly on Wednesday before falling back.
"Oil prices have been increasing significantly. Now if this high level of prices is maintained then it will have an impact on the economy," European Commission spokeswoman Amelia Torres told a news briefing.
The price of crude is up more than 71% from the same time a year ago, bolstered by thinning inventory levels, soaring demand from China and other developing countries, a weak U.S. dollar and geopolitical turmoil.
President Bush told Reuters Thursday that he was concerned about $100 oil, but saw no reason to tap the nation's emergency crude reserve.
Thursday's gains came after the U.S. Energy Information Administration reported that commercial crude stockpiles fell 4.0 million barrels last week to the lowest level since January 2005.
Crude stocks in the United States have dropped more than 25 million barrels, or nearly 8%, since early November as import flows slowed down and shipments were hindered by foul weather on the Gulf Coast.
Adding support, Mexico's main oil export ports remained shut Thursday after foul weather hit this week. Mexico is a top-three supplier of oil to the United States.
Thursday's gains added to a near 4% gain on Wednesday that was triggered by violence in Nigeria's main oil port city, further threatening supplies from the world's eighth largest crude exporter.
Frequent attacks by militant groups since February 2006 have driven thousands of foreign oil workers from the oil-rich Niger Delta and cut oil exports by about 20%.
Oil, which rose 57% in 2007, has scope to push even higher in 2008 along with other commodities, analysts said.
Copyright 2008 Reuters Limited.
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Print | posted on Thursday, January 03, 2008 5:06 PM