By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) — Benchmark U.S. crude-oil futures eased in electronic trade Thursday, giving up some of their strong gains from Wednesday as the dollar edged higher.
During East Asia trading hours Thursday, oil for January delivery CLF3 -0.46% lost 20 cents or 0.2% to $86.57 a barrel.
The drop followed January crude’s 1.1% advance on the New York Mercantile Exchange Wednesday, when the contract touched a high of $87.68.
The gains Wednesday came amid a trio of bullish influences: The Federal Reserve unveiled its latest bond-buying program, the Organization of the Petroleum Exporting Countries held its production quota steady, and the International Energy Agency slightly raised its forecast for oil demand for 2013. Read: Oil ends higher, near $87 a barrel.
Deutsche Bank head of Asia commodities research Soozhana Choi cited the Fed action and the IEA forecast as particularly helpful for crude prices.
“This [Federal Reserve move] is seen as positive for equities, negative for the U.S. dollar and consequently constructive for commodities. Upward revisions to global oil demand by the International Energy Agency were also seen as supportive for oil,” Choi said.
But while Wednesday’s weaker dollar helped oil prices, the greenback rebounded slightly Thursday, as the ICE dollar index DXY -0.03% inched higher to 79.889, up from 79.858 late in North America the previous day.
Analysts at Citi Futures said current prices for benchmark U.S. crude were roughly where they should be for now.
“We continue to recommend standing aside from trading [benchmark Nymex] crude oil, which we see as more fairly valued relative to its direct fundamentals,” they said.
Elsewhere in the energy complex, natural gas for January delivery NGF13 -0.24% eased 0.1% — a loss of less than a penny — to remain at $3.38 per million British thermal units
January gasoline RBF3 -0.25% also slipped less than a cent to $2.65 a gallon, while January heating HOF3 +0.05% was little changed at $2.97 per gallon.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
