By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Oil futures slipped on Friday, with a stronger dollar adding pressure and as investors banked some profits after a solid performance the prior day.
Oil for February delivery CLG3 -0.80% lost 62 cents, or 0.7%, to $93.20 a barrel in electronic trading.
The contract rose the previous day as Chinese export data spurred optimism among investors, while a report said Saudi Arabia, the world’s top oil exporter, cut production nearly 5% in December.
“We believe the market overreacted to these preliminary December estimates from Gulf officials. Sure, Saudi production most likely declined in December, but we would not be overly concerned unless the trend were sustained into [the first quarter of 2013],” said Andrey Kryuchenkov, commodity analyst at VTB Capital, in a note.
“Aside from easing consumption outside Saudi Arabia at the end of 2012, one also needs to remember that domestic crude demand peaks in summer (especially due to direct crude burn for power generation) with consumption falling into the winter period,” he added.
Investors further looked to data releases in China Friday. The consumer price index unexpectedly climbed 2.5%, hitting a seven-month high and stoking fears of limited additional monetary stimulus in the near term. See: China consumer inflation quickens on food costs
The pullback in oil prices also came as the U.S. dollar strengthened, making dollar-denominated commodities less attractive for other currency holders. The ICE dollar index DXY -0.02% rose to 79.81 from 79.793 in late North American trade Thursday.
In other energy trading, gasoline for February delivery RBG3 -1.75% slid 1.3% to $2.76 a gallon, while February heating oil HOG3 -1.04% gave up 0.8% to $3.03 a gallon. February natural gas climbed 1.9% to $3.27 per million British thermal units.
Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.
