Nymex crude heads for monthly loss on supply concerns
By William L. Watts, MarketWatch
NEW YORK (MarketWatch) — Nymex oil futures edged higher Friday, rising slightly from near a six-month low as a marginally weaker dollar contributed to a positive tone in commodity markets as U.S. traders returned from the Thanksgiving Day holiday.
Crude oil for January delivery CLF4 +0.68% rose 35 cents, or 0.4%, to $92.65 a barrel on the New York Mercantile Exchange. Nymex energy futures are set to close early Friday at 1:30 p.m. Eastern.
January natural gas NGF14 +0.64% , meanwhile, was down nearly a penny at $3.887 per million British thermal units after earlier notching an intraday high at $3.94, its highest level since Oct. 18.
The January contract is on track for a 6% monthly rise, according to FactSet, boosted by short covering due to low temperatures in the Eastern U.S. that have fueled expectations for a more pronounced inventory reduction, wrote strategists at Commerzbank. That said, plentiful stock levels and record-high production should serve to limit further gains, they wrote.
January oil is on track for a 4.1% monthly decline. Oil closed at its lowest level in nearly six months on Wednesday after U.S. government data showed that crude supplies rose for the 10th week in a row.
On the technical front, Nymex crude has already tested the key $91-$92 support area, noted Fawad Razaqzada, strategist at Forex.com. That level marks a long-term bullish trend line, he said, adding that if buyers manage to defend this level for a few days, “then prices could stage some sort of a recovery, although the first level of resistance, at $93, is not too far away.”
The ICE dollar index DXY -0.03% , which tracks the U.S. unit against a basket of six major rivals, fell 0.3% to 80.517. A weaker currency can boost dollar-denominated commodities because it makes the products cheaper to users of other currencies.
The dollar, however, has strengthened over the course of the month, with the index on track for a 0.4% monthly rise, while posting a 0.9% gain since the beginning of the year.
Elsewhere, ICE Brent crude futures UK:LCOF4 -0.01% rose 30 cents to $111.17 a barrel, leaving the contract on pace for a 2.3% monthly rise, boosted by supply outages in Libya.
In products markets, December gasoline RBZ3 -0.46% was up less than a penny at $2.70 a gallon, while December heating oil HO 0.00% was flat at $3.04 a gallon. Both contracts expire Friday, with January contracts set to become the front month for both products on Monday.
William L. Watts is MarketWatch's senior markets writer, based in New York. Follow him on Twitter @wlwatts.
