Oil prices pulled back today after surging on yesterday’s inventories report from the US Department of Energy, which said that oil stockpiles shed a massive 9.9 million barrels.
This was the largest weekly decline in eight years and served as a sign that energy demand in the US is picking up.
Crude oil futures were pressured by concerns over Europe’s debt problems after Moody’s put Spain’s credit rating under review just a few months after downgrading it to Aa1.
The prices were supported by yesterday’s US data, which showed that industrial production rose 0.4% in November, while consumer prices climbed 0.1%.
The Empire State manufacturing index rose from -11.4 in November to 10.6 in December.
US light, sweet crude for January delivery, which is currently the most actively traded contract on the New York Mercantile Exchange (NYMEX), declined to US$88.21/barrel. February crude fell to US$88.86/barrel.
On the ICE Exchange, January Brent Crude stood at US$91.84/barrel. Brent for February delivery last traded at US$91.80/barrel.
Supermajors were in decline with BP (LON:BP) slipping 1.65% and Shell (LON:RDSB) posting a small loss.
BG Group (LON:BG), Cairn Energy (LON:CNE) and Tullow Oil (LON:TLW) tacked on less than 1%.
Amec (LON:AMEC) held steady. Another engineering firm Petrofac (LON:PFC) stood just above the opening level.
Midcaps were mixed.
Heritage Oil (LON:HOIL), Premier Oil (LON:PMO) and Soco International (LON:SIA) climbed 1%.
Melrose Resources (LON:MRS) posted a small gain.
Salamander Energy (LON:SMDR) lost 1%, while JKX Oil & Gas (LON:JKX) declined marginally, as did service company Wood Group (LON:WG).
North Sea oilfield developer Xcite Energy (LON:XEL) did well, climbing 5%.