Dawn News

March, 31 2015

Oil falls as uncertainty hits energy markets

—File Photo
—File Photo

BANGKOK: Oil prices fell Monday following uncertainty about future action from the US Federal Reserve and data showing that the US unemployment rate remained unchanged.    

Benchmark crude for February delivery fell 20 cents to $92.89 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange.

The contract closed up 17 cents at $93.09 a barrel on the Nymex on Friday after the US Energy Department's Energy Information Administration reported a much bigger drop in the nation's crude supplies than analysts expected.

Separately, crude stocks fell by about 12 million barrels for the week ending Dec 28, according to the American Petroleum Institute.

Monday's decline in oil prices follows the release of a transcript of the Federal Reserve's December meeting showing that policymakers disagreed over how long to keep a bond-purchase program in place.

Traders inferred the Fed might shorten the program, which could send US interest rates, and therefore the dollar, higher. That in turn would hurt the price of oil.

Oil, which is priced in dollars, tends to fall as the dollar strengthens and makes crude more expensive for investors holding foreign currencies.

“Crude oil prices have struggled to react with conviction one way or the other,” said Michael Hewson, senior market analyst at CMC Markets in an email commentary.

Meanwhile, US employers added 155,000 jobs in December, but the growth wasn't enough to reduce the unemployment rate, which remained 7.8 per cent last month, the Labour Department said Friday.

The rate for November was revised up from an initially reported 7.7 per cent.

Brent crude, used to price international varieties of oil, rose 16 cents to $111.47 a barrel on the ICE Futures exchange in London.

In other energy futures trading on the New York Mercantile Exchange: -    Wholesale gasoline rose 0.1 cent to $2.7655 a gallon. -    Heating oil rose 0.3 cents to $3.021 a gallon. -    Natural gas rose 2.4 cents to $3.311 per 1,000 cubic feet.

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