Oil prices steady above $97 a barrel

By THOMAS HOGUE, AP Business Writer 2 hours, 42 minutes ago

BANGKOK, Thailand - Crude oil prices were steady above $97 a barrel Thursday after failing to break above $100 as a U.S. weekly inventory report showed crude oil inventories rose at a key oil terminal.
The rise at the Cushing, Okla., the physical delivery point for oil contracts bought on the New York Mercantile Exchange, offset the impact from an unexpected drop in the overall stockpiles. Falling supplies at the terminal are seen as a symptom of a tight market, and the gain in Cushing eased those concerns.

Light, sweet crude for January delivery rose 6 cents to $97.35 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.

On Wednesday, the contract fell 74 cents to settle at $97.29 a barrel during the New York floor session, retreating from an intraday record of $99.29 a barrel during electronic trading earlier in the day.

Singapore Prime Minister Lee Hsien Loong said late Wednesday that the record high oil prices are a burden on Asian nations.

"For those of us who are not oil exporters, and we import all our oil, this is a burden which is growing," he said. "It is particularly a burden on the low-income groups, and it's also a factor in increasing the inflation rate and the cost of living for consumers in their countries."

Lee also quoted the leader of India, which subsidizes fuel, as telling other Asian heads of state during meetings in Singapore that the cost of energy is of greater concern to him than the effects of climate change.

A swoon in global stock markets also depressed oil prices Wednesday. Energy investors worry that falling equities are a symptom of weakening economies that would use less oil and gasoline.

Oil inventories fell 1.1 million barrels last week, according to the U.S. Energy Department's Energy Information Agency. Analysts surveyed by Dow Jones Newswires had forecast, on average, an increase of 700,000 barrels. Cushing inventories, though, rose 1.2 million barrels, their first substantial increase in weeks and the largest since the end of August.

The EIA also said refinery activity fell last week, countering expectations for a slight increase. Gasoline inventories grew less than expected, and distillate supplies fell by 2.4 million barrels, far more than expected.

The decline in overall crude supplies can be explained in part by imports, which fell by an average of 667,000 barrels a day, or about 6 percent, last week. Gasoline imports rose 11 percent.

Crude prices are within the range of inflation-adjusted highs set in early 1980. Depending on how the adjustment is calculated, $38 a barrel then would be worth $96 to $103 or more today.

January Brent crude rose 26 cents to $95.10 a barrel on the ICE Futures exchange in London.

January heating oil futures rose 0.48 cent to $2.7025 a gallon, while January gasoline prices added 0.42 cent to $2.4395 a gallon. December natural gas futures rose 3 cents to $7.58 per 1,000 cubic feet.

The Nymex will be closed Thursday for Thanksgiving Day and will close early Friday, but electronic trading will not be affected.