LITTLE ROCK — Energy prices are ending the year on an upswing with large storms, falling supplies, a weak dollar and a slightly better employment picture sending futures higher.
Crude futures closed above $78 per barrel for the first time in more than a month Thursday in shortened Christmas Eve trading as the government reported that unemployment-benefit claims from newly laid-off workers fell for the 16thstraight week.
Such claims, reported on a four-week basis, reached their lowest levels since last September when the breadth of the economic crisis became clear.
Yet all of those factors haven’t seriously dented huge stores of crude, natural gas and gasoline. Even with a 5 million-barrel draw on crude reported Wednesday by the government, supplies remain ample.
The amount of crude at Cushing, Okla., where crude traded on the New York Mercantile Exchange is stored, is very close to record highs.
For consumers, that means that any increase in prices at the retail level may not last.
The economy remains fragile and save for an occasional jump in demand during Christmas shopping, people are not buying gasoline and other fuels in large quantities. Even distillates, which include heating oil, remain at historically high levels despite winter storms in the Northeast and Midwest.
Industrial demand for natural gas is extremely weak. The government said Thursday that natural gas in storage fell by a less-than-expected 166 billion cubic feet to 3.4 trillion cubic feet. Gas in storage is 13 percent above the five-year average.
Refineries that convert oil to fuel are slowing their purchases of crude drastically.Over the past two weeks the amount of crude going into refineries is down 144,000 barrels each day.
Analyst Stephen Schork says Wall Street trading firms may be buying oil contracts in large numbers, but refineries are shutting down because they can’t turn a profit buying crude.
This year, refineries have shut down in California, New Jersey, New Mexico, and most recently in Delaware City, Del.
“Demand to import and refine crude oil by the guys who import and refine crude oil will remain low into the first quarter,” Schork said.
With millions of people packing up cars and traveling, retail gasoline prices remain flat. The average price for a gallon of gas is $2.584, according to auto club AAA, Wright Express and Oil Price Information Service. Prices are a nickel lower than a month ago and far from the peak reached in late October close to $2.70.
In Arkansas, the average price of a gallon of gasoline on Thursday was $2.44, according to AAA.
A better job picture helped push energy futures higher Thursday before the long weekend.
Benchmark crude for February delivery rose nearly 2 percent, or $1.38 to settle at $78.05 on the Nymex.
In other Nymex trading in January contracts, heating oil rose 1.5 cents to $2.0269 while gasoline rose 1.6 cents to $1.9827. Natural gas fell 5.5 cents to $5.766 per 1,000 cubic feet.
In London, Brent crude for February delivery rose 40 cents to $75.85 on the ICE Futures exchange.
Information for this article was contributed by Pablo Gorondi and Alex Kennedy of The Associated Press.
Business, Pages 25 on 12/25/2009