Crude Oil Ends Below $97 A Barrel

(RTTNews) - U.S. crude oil ended lower on Friday, as investors mulled over the Energy Information Administration's weekly report that showed a better than expected rise in crude and gasoline stockpiles in the U.S. The dollar also strengthened against a basket of major currencies, making oil more expensive for buyers holding foreign currencies.

Investors were also concerned over the sluggishness seen in the Chinese economy, the second largest energy consumer in the world, after a key indicator of China's factory sector performance dropped sharply in January, indicating a contraction in business activity. China's headline purchasing managers' index dropped to a six-month low of 49.6 in January from 50.5 in December. A reading above 50 indicates expansion of the sector, while a reading below 50 suggests contraction.

Light Sweet Crude Oil futures for March delivery, the most actively traded contract, shed $0.68 or 0.7 percent to close at $96.64 a barrel on the New York Mercantile Exchange Friday.

Crude prices for March delivery scaled a high of $97.80 a barrel intraday and a low of $96.25.

Yesterday, oil moved up to settle at a three-week high after data from the U.S. Energy Information Administration showed distillate stockpiles to have declined more than expected last week, not withstanding a better than expected rise in crude and gasoline inventories.

The EIA report on Thursday showed U.S. crude oil inventories to have climbed 1 million barrels for the week ended January 17, while analysts expected an increase of 0.6 million barrels. Gasoline stockpile rose 2.1 million barrels last week, while distillate stockpiles, which include diesel and heating oil, dropped by 3.2 million barrels. Analysts anticipated gasoline stockpiles to rise 1.7 million barrels with distillate inventories expected to decline by 1.2 million barrels.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.45 on Friday, down from its previous close of 80.48 late Thursday in North American trade. The dollar scaled a high of 80.56 intraday and a low of 80.15.

The euro traded lower against the dollar at $1.3683 on Friday, as compared to its previous close of $1.3696 late Thursday in North America. The euro scaled a high of $1.3738 intraday and a low of $1.3664.

In economic news, U.K. mortgage approvals increased less than expected in December, figures released by the British Bankers' Association said. The number of mortgages approved for house purchases rose to 46,521 from 45,394 in November. The figure was less than an expected 47,300.