KEY POINTS:
Oil held steady yesterday, hovering at about US$99 a barrel, after falling the day before as traders took profits from a record rally that propelled crude prices to over US$100 a barrel.
US light crude for February delivery rose 11c to US$99.29 a barrel in Globex electronic trading
by 05.30 GMT. It settled down 44c at US$99.18 a barrel on Thursday, after hitting a lifetime high of US$100.09 earlier in the day on data showing a fall in US inventories.
London Brent crude rose 30c to US$97.90.
"With the circus surrounding the breaching of US$100 due to move out of town soon, the market is now likely to enter something of a quieter period of consolidation, before next month's pivotal Opec meeting," said Paul Horsnell from Barclays Capital Research.
Oil's march past the US$100 mark on Thursday came after the US Energy Information Administration reported that crude stocks fell 4 million barrels last week to a three-year low, while heating oil supplies fell by 1.4 million barrels to 38.4 million barrels - the eighth consecutive week of decline.
Crude stocks in the United States, the world's top energy consumer, have dropped more than 25 million barrels, or nearly 8 per cent, since early November as imports slowed down and shipments were hindered by bad weather on the Gulf Coast.
Some analysts said the reluctance of Opec and other key agencies to increase crude supplies, despite oil's break above the US$100 level, combined with geopolitical turmoil, would keep oil prices at record levels.
The Organisation of Petroleum Exporting Countries decided at its last meeting in December to maintain output restrictions, while officials have lined up to say the exporter group could do little to tame oil prices since world markets were already well-supplied.
The Paris-based International Energy Agency has also echoed the White House in saying there was no need for a release of emergency crude stockpiles.
In the days ahead, analysts said the market would continue to watch for moves in other commodities, after gold and platinum hit historic highs The US dollar is another focal point, after it fell further against the euro and the yen on Thursday.
The closure of Mexico's key oil ports would also support prices on worries that shipments could be delayed. Mexico is one of the top three crude suppliers to the US.
The US Labour Department will release non-farm payrolls data for December today, with worries that the latest numbers may add to evidence the world's largest economy is heading towards a recession.
- Reuters
