Oil Prices Dip On Profit-Taking, Low-Volume Trade

Crude-oil traded lower in late Asian hours Friday, as low trading volumes are keeping prices volatile. Yet prices headed for the second weekly gain, buoyed by a better outlook for fuel demand in the United States, the world`s largest oil consumer and Libyan supply cuts.
 
Trading sentiment turned weak after prices declined in Asian trade on profit-taking following gains in New York fueled by upbeat sentiment over the U.S. Federal Reserve’s decision to start winding down its $85 billion asset-purchase program.
 
Oil gained in the previous session, buoyed by the Fed’s decision to start reducing its massive bond buying program in January, which added to hopes that the world`s biggest economy is on the path to recovery.
 
The Fed’s move was accompanied by a pledge to continue with its ultra-low interest rates even after achieving its goal of bringing unemployment below 6.5 percent threshold, giving oil a boost on Thursday, especially as hopes for a robust 2014 economic growth.
 
As of 3.31 ET, New York’s main contract, West Texas Intermediate (WTI) fell 0.28 percent or 0.28 points to trade at $ 98.76 a barrel. While ICE Brent Crude rose 0.06 percent to trade at $ 110.36 a barrel.
 
Oil markets are still mainly driven by fundamentals. However, sluggish economic indicators met a muted response in energy markets.
 
Data showed that unemployment benefits rose more than expected for the second straight week and initial claims for jobless benefits increased to their highest level since March, damping the positive sentiment over the U.S. economic recovery.
 
A separate report showed that U.S. existing home sales declined 4.3% to a seasonally adjusted 4.90 million units in November from 5.12 million in October.
 
On Friday, the U.S. third quarter GDP data are scheduled for release, which will give a clearer picture of the sustainable growth Fed officials believe has been achieved. The annualized rate might show a remarkable 3.6 percent growth, something that is hard to imagine could happen in any country in the Eurozone anytime soon.
 
Libya Cuts Oil Supply
In Libya, oil exports dropped to 110,000 barrels per day from over 1 million in July, while the OPEC producer`s second-largest is stepping up fuel imports, with four tankers queuing at one port with its refinery running at only half-capacity due to oilfield strikes.
 
- Natural gas is trading at $ 4.467 per cubic feet after rising 0.16%
 
- Gasoline is trading at $ 2.7490 per cubic feet after rising 0.32%
 
- Heating oil (diesel) is trading at $ 3.0363 a gallon after rising 0.19%
 
Elsewhere, data from the American Petroleum Institute showed on Thursday that demand for petroleum products rose more-than-expected in November, hitting its highest level in six years.