Oil Ends Above $104, Up 6.8%
Crude surged again in afternoon trading on
Friday and closed above $104 a barrel. Light sweet crude for October
delivery ended at $104.55, up $6.67 on the session. Earlier, crude hit
as high as $105.25.
The rebound more than erased the sharp drop towards $90 a barrel that
crude saw earlier in the week. Crude climbed Friday amid government
moves that pushed U.S. stocks sharply higher and halted fears of lower
energy demand.
The U.S. Treasury Department announced Friday that it has set up a
program to guarantee the U.S. money market mutual fund industry. This is
part of a comprehensive plan government authorities are cobbling
together to help calm turmoil in the financial markets.
The announcement came close on the heels of news that the Securities and
Exchange Commission had temporarily banned short selling in financial
stocks. Also, top administration officials met with leading lawmakers
late Thursday to discuss other programs that might be put into action to
stem the financial crisis.
Crude oil closed also soared above $102 a barrel on Thursday but then
dropped back below $100. The retreat came after the Energy Information
Administration reported natural gas inventories were up 67 billion cubic
feet in the week ended Sept. 12, which was more than expected.
Oil surged on Wednesday as EIA data that showed a fourth straight drop
in weekly inventories. Crude oil inventories decreased by 6.3 million
barrels in the week ended Sept. 12. Experts were calling for a drop of
about 3.5 million barrels. Meanwhile, motor gasoline inventories
decreased by 3.3 million barrels last week, which was in-line with
analysts` expectations.
Meanwhile, Goldman Sachs oil analyst Arjun Murti cut his benchmark U.S.
crude forecast to $110 a barrel, down from the $140 he had previously
projected. In May, Murti suggested a `super spike` in oil prices to $150
to $200 a barrel in the following six to 24 months.
Crude oil dropped sharply on Monday and Tuesday and fell as low as
$90.55. On Tuesday, Goldman Sachs cut its three-month crude oil to $115
a barrel, down from $149 and dropped its six-month outlook from $142 to
$125. The firm also lowered its 2009 average price forecast to $123,
down from $148. Crude oil plunged more than 5 percent on Monday to move
below the key $100 level. |
