Oil rallies late on weekly inventory data, Russia-Ukraine gas showdown
But the gains did little to erase a year best remembered for deep losses in a sector that six months ago was setting daily record-highs. A record drop in oil prices and a deep chill in the global economy take most of the blame for the sector's steep slump.
The Amex Oil Index ended the session with a 1% advance to 979.68 points, leaving it with a 37.2% loss for the year. The index of major petroleum producers and refiners is down nearly 40% from its record high close of 1,625 points on May 21, back when crude-oil prices were still on a meteoric rise to their own all-time-high of $147 a barrel.
But it could have been worse. The index is also up nearly 22% from a 52-week low of 859 points it hit Oct. 10.
Exxon Mobil shares lost 15% of their value in 2008 and Chevron gave up nearly 21%. Both stocks are components of the 30-stock Dow Jones Industrial Average (INDU:
, , ) , which ended the year with a 33.8% loss, its worst performance since 1931.
Crude futures spiked $5.57 to $44.60 a barrel on the New York Mercantile Exchange after Russia threatened to halt natural gas shipments to neighboring Ukraine, which could impact West European supplies, and traders engaged in a bout of year-end short-covering following the latest weekly U.S. fuel supply data. See Futures Movers.
The Amex Natural Gas Indexwrapped up 2008 with a 1.4% gain at 375.44 points, down 34.54% for the year.
The Philadelphia Oil Service Index ($OSX:
, , ) rose 1.1% to 121.39 points, a brutal 60% drop from where it began the year as falling energy prices crushed demand for drilling services and oil field suppliers.
Crude oil prices are now down about 75% from their peak in early July and off more than 60% for the year in the face of oversupply and slowing demand.
Even with all the losses in oil prices, Phil Flynn, vice president at Alaron Trading oil prices will face more downward pressure in January. See video: Oil investors brace for a tough January.
Average retail gasoline prices continued their slide as well in December, falling to $1.62 a gallon on Wednesday, down about 20 cents for the month, according to the AAA Daily Fuel Gauge Report.
Even though prices at the pump are now about 45% lower than they were a year ago and significantly below $2 a gallon, 52% of Americans told Gallup that they have not gone back to their old gas-guzzling ways. See full story.
