/ 22 November 2007

Oil steady above $97

Oil steadied above $97 a barrel on Thursday, after falling just shy of the $100 milestone in the previous session, as the dollar tumbled to fresh record lows.

United States light crude for January delivery was down one cent at $97,28 a barrel by 2.40pm GMT. Oil briefly surged to a lifetime peak of $99,29 a barrel on Wednesday, before settling 74 cents lower.

London Brent crude was 16 cents higher at $95 a barrel.

”Because of the [US] Thanksgiving holiday it will probably be relatively quiet,” said Simon Wardell, analyst at Global Insight.

Nymex floor trading was closed on Thursday for the Thanksgiving holiday, although Globex electronic trade continued as normal.

Oil has been rising inversely to the dollar over the past months amid a fever of speculative trading and tightening stocks ahead of the winter.

The dollar hit a record low against the euro, the Swiss franc and a basket of currencies on Thursday, as the market anticipated that the Federal Reserve would deliver an interest-rate cut next month.

A mixed US inventory report cut short oil’s rally towards $100 on Wednesday.

Crude stocks at the delivery point for US crude futures in Cushing, Oklahoma, rose by 1,2-million barrels to 14,6-million barrels last week, overshadowing an overall drawdown in US crude stocks.

”The inventory increase at this key physical delivery point of the Nymex crude-oil contract obviously caught the market somewhat flat-footed, leading to the price pullback,” First Energy Capital said in its daily market statement.

The US government showed a larger-than-expected 2,4-million-barrel drop in distillate stocks, which include heating oil and diesel fuel, ahead of a chilly winter in the US north-east. — Reuters