Oil Fluctuates After Biggest Weekly Gain in Almost Four Months

by on January 7, 2013 5:02 am GMT

Oil fluctuated in New York after capping the biggest weekly advance in almost four months amid signs of economic growth in the U.S., the world’s largest crude- consuming nation.

Futures swung between gains and losses after rising 2.5 percent last week, the most since Sept. 14. U.S. employers added 155,000 workers in December, exceeding the 152,000 median forecast in a Bloomberg survey, Labor Department data showed Jan. 4. Crude halted its increase after reaching technical resistance, according to data compiled by Bloomberg.

“Oil finished very strong last week and so far today there’s not been much movement,” said Victor Shum, the managing director at IHS Consulting in Singapore. “The markets primarily reacted to the U.S. jobs data. I wouldn’t be surprised if we saw some pullback.”

Crude for February delivery was at $93.02 a barrel, down 7 cents, in electronic trading on the New York Mercantile Exchange at 2:38 p.m. Sydney time. The contract rose 17 cents to $93.09 on Jan. 4, the highest settlement since Jan. 2. Prices slid 7.1 percent last year.

Brent for February settlement increased 13 cents to $111.44 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $18.42 to West Texas Intermediate futures. The difference was $18.22 on Jan. 4, the narrowest in more than three months.

Technical Resistance

Last week’s rally took WTI futures to technical resistance along the 50-week moving average, according to data compiled by Bloomberg. This indicator is around $93.70 a barrel today. Sell orders tend to be clustered near chart-resistance levels.

Hedge funds raised bullish bets on WTI to the highest level in 11 weeks before lawmakers passed a bill to undo automatic tax increases that threatened the U.S. economy. Money managers boosted net-long positions by 11 percent in the seven days ended Jan. 1 to the most since Oct. 16, the Commodity Futures Trading Commission’s Commitments of Traders report showed on Jan. 4.

The House of Representatives approved a Senate bill at 11 p.m. on Jan. 1, protecting 99 percent of households from higher income taxes.

WTI may rise this week on speculation that stronger economic growth will increase fuel demand, a Bloomberg News survey showed Jan. 4. Fourteen of 24 analysts and traders, or 58 percent, surveyed last week forecast New York crude will gain through Jan. 11. Five respondents, or 21 percent, predicted a drop and five said there would be little change.