Oil hovered fell to just above $79 a barrel today and was set for its first weekly drop in more than a month on disappointing economic data and expectations for reduced heating demand in the United States.
US retail sales declined in December for the first time in three months, the Commerce Department said yesterday, while Labor Department data showed more people sought jobless benefits last week.
Prices edged up briefly a day earlier after US regulators announced proposals to put a cap on the size of positions dealers can hold, aiming to limit speculation, which traders considered not as stringent as feared.
US crude oil futures for February delivery fell 35 cents to $79.04 a barrel. Prices, which have fallen every day this week, have shed about $5 from a 15-month intraday high of $83.95 on Monday, and touched a 2010 low of $78.37 two days ago.
The new front-month March contract for London Brent crude slid 47 cents to $78.10.
Crude and fuel inventories in the United States rose last week despite unusually cold weather. Temperatures are now forecast to exceed the seasonal norm, suppressing consumption.
US demand for distillates, a fuel category which includes heating oil, was 4 per cent below year-earlier levels in the four weeks ended January 8th, a government report showed on Wednesday.
Reuters
