Oil Markets - Friday, January 4

[dan_s]

February crude oil prices experienced a volatile session, first with a decline to a new three day low followed by a positive close. The market came under early selling pressure from weakness in outside markets and a new three week high in the US dollar. Some traders said the slide toward the $91.50 level earlier in the session seemed to attract modest buying interest. February crude oil prices turned into positive territory following this morning's much better than expected read on the US service sector growth in December. Meanwhile, this morning's EIA inventory report showed a much larger than expected draw down last week of 11.120 million barrels. While that would normally be seen as a positive force, some traders attributed the large draw to year-end inventory adjustments. Crude oil imports for the week stood at 7.094 million barrels per day compared to 8.025 million barrels the previous week. The refinery operating rate was up 0.1% to 90.4%. February crude oil prices ended the trading week with a gain of $2.29 and near the upper end of the range.