Oil falls below $96 after early rise
- Article by: JONATHAN FAHEY
- Associated Press
- February 8, 2013 - 2:06 PM
NEW YORK - Oil prices slipped back below $96 a barrel Friday afternoon, reversing course after rising earlier in the day.
Benchmark crude for March delivery fell 11 cents to finish at $95.72 per barrel on the New York Mercantile Exchange. It rose as high as $96.57 in the morning.
U.S., drivers still can't catch a break at the pump. The average price for a gallon of gas rose a penny to $3.57. That's up 27 cents from a month ago and 8 cents more than last year at this time.
Drivers in Massachusetts who are filling up ahead of a massive blizzard that could dump up to 3 feet of snow are paying an average of $3.69. Connecticut drivers are paying around $3.90, while the average pump price in New York is $3.92 a gallon. Local television coverage showed lines of cars at gas stations reminiscent of those seen after Superstorm Sandy.
Once they fill up and stock up on groceries, many people in the Northeast might not drive again for a day or more. Demand for gasoline should drop, supplies should rise and prices in the region should drop a bit, says Tom Kloza, chief oil analyst for Oil Price Information Service.
"The simple impact (these storms) have is that they destroy demand for a period of time," Kloza says.
The brunt of the storm is not expected to hit refineries around New York and Philadelphia the way that Superstorm Sandy did, so no supply disruptions are expected. If New England ports get snowed in for a few days, it could delay shipments of gasoline by barge, which could lead to reduced supplies, Kloza says.
The storm could bring a break in gasoline prices after a steady march upward in recent weeks. Kloza thinks that later in February and in March prices will rise as they do most years, but perhaps not as fast, because prices have already climbed so high.
"We were in an uptrend but clearly it was too brisk," he said. "The market borrowed some of the increases that usually come in February and March."
Oil rose initially after a report showing that China's trade growth surged in January. Exports soared 25 percent from a year earlier and import growth rocketed to 28 percent.
Analysts said the year-on-year data could be distorted because the Lunar New Year holidays fell in January in 2012. Last year companies picked up pace in January to fill orders before shutting down for the holiday, which this year falls in February.
And the Commerce Department said Friday that the U.S. trade deficit fell nearly 21 percent in December from November, as oil imports plummeted. That's the smallest trade deficit in nearly three years. The smaller trade gap means the economy probably performed better in the fourth quarter than first estimated last week.
But those gains evaporated in the afternoon.
In London, Brent crude, used to price international varieties of oil, rose $1.66 to end at $118.90 a barrel on the ICE Futures exchange.
In other energy futures trading on the Nymex:
_ Wholesale gasoline rose 6 cents to finish at $3.06 a gallon.
_ Natural gas fell 1 cent to end at $3.27 per 1,000 cubic feet.
_ Heating oil gained 4 cents to finish at $3.24 a gallon.
Pamela Sampson in Bangkok and Pablo Gorondi in Budapest contributed to this report.
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