Oil prices slipped closer to $100 a barrel Friday as fresh U.S. economic data and higher-than-expected crude supplies pointed to weaker demand.
By early afternoon in Europe,
benchmark U.S. crude for March delivery was down 16 cents to $100.19 a barrel
in electronic trading on the New York Mercantile Exchange. On Thursday, the
Nymex contract eased 2 cents to close at $100.35.
A report showed that cold weather
caused U.S. retail sales to drop in January for a second straight month as
Americans spent less on autos and clothing and at restaurants during a brutally
cold month. Weekly jobless claims were also higher than expected.
Prices "have slipped slightly as
weaker than expected initial weekly jobless claims and retail sales put a cap
on further price rises on heightened concerns over a weaker short term demand
outlook," said a note to clients from Sucden Financial Research in London.
The severe cold weather has mixed
influences on energy prices. It has boosted consumption of fuels such as
heating oil, but more people staying at home suggest less travel and less use
The Energy Department said crude
stockpiles rose 3.3 million barrels last week, more than analysts had expected,
while distillate stocks, which include heating fuels and diesel, fell far less
Oil prices near $100 a barrel have
also found support in the latest forecasts from the International Energy
Agency, the Organizations of Petroleum Exporting Countries and the Energy
Information Administration, which upgraded demand expectations.
"European oil demand will
continue its falling trend due to substitution effects and efficiency gains but
the pace of the decline will be slower as improving economic conditions are
positively affecting fuel consumption from the transportation and industrial
sectors," said JBC Energy in Vienna.
Brent crude, which is used to set
prices for international varieties of crude, was down 5 cents to $108.47 on the
ICE Futures exchange in London.
In other energy futures trading in New
- Wholesale gasoline shed 0.21 cent to
$2.946 per gallon.
- Heating oil added 0.81 cent to
$2.9984 a gallon.
- Natural gas gained 12 cents to
$5.343 per 1,000 cubic feet.