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Crude oil hovers near US$100 a barrel in thin, pre-New Year's trading

The price of oil retreated slightly in thin trading Monday to close below US$100 a barrel.

Benchmark West Texas Intermediate crude for February delivery ended the day down $1.03 at US$99.29 on the New York Mercantile Exchange.

On Friday, oil had closed above US$100 for the first time since Oct. 18 on prospects of a U.S. economic recovery.

The U.S. Energy Information Administration said Friday that U.S. crude stockpiles fell 4.7 million barrels the week ended Dec. 20. It was the fourth straight week of draws on crude stocks.

While signs of an improving economy in the U.S. have supported prices, analysts noted that oil consumption in other parts of the world could be held back by a strengthening U.S. dollar, which makes oil more expensive for other countries.

"The recovery of the U.S. economy is fuelling expectations of higher oil demand in the U.S.," said Olivier Jakob of Petromatrix in Switzerland. "But on a worldwide basis, the stronger U.S. dollar that comes with an improvement of the U.S. economy is a negative for oil demand growth."

Others noted that interest from financial speculators would help push oil prices higher.

"Look for the price surge to continue into these final days of 2013, and the first days of 2014," said the Kilduff Report, which is edited by Michael Fitzpatrick. "New money will be put to work in commodities, causing part of the rise."

Brent crude, a benchmark for international oils, fell 97 cents to US$111.21 a barrel on the ICE Futures exchange in London.

Brent's decline was attributed to reports that some of the oil production, refinery and export facilities in Libya — which have been struggling to remain in operation since the 2011 civil war that ousted Moammar Gadhafi — were back in business.

In other energy futures trading on Nymex, wholesale gasoline lost three cents to US$2.79 a U.S. gallon (3.79 litres), heating oil fell five cents to US$3.08 a gallon and natural gas jumped six cents to US$4.43 a 1,000 cubic feet.


The Canadian Press

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