Oil prices climb modestly, shrugging off piracy reports
Oil prices rose modestly Monday, but not as high as some analysts had expected amid reports of piracy and other trouble at sea that could have threatened deliveries.
Crude oil futures for January delivery climbed $1.23, or 1.6%, to $77.28 a barrel on the New York Mercantile Exchange. Retail gasoline prices fell, on average, by 1.9 cents to $2.921 a gallon in California and by a penny to $2.629 nationally.
Through last week, U.S. crude supplies were on the rise and running 17 million barrels ahead of last year at 337.8 million barrels, the Energy Department said.
Analysts said they were surprised that oil futures didn’t rise further, considering several factors in the news that could have pushed prices up. These included a weak U.S. dollar and reports of piracy on two oceans.
Much of the reason for the moderate response in oil prices had to do with plentiful supplies.
That muffled the effect of a Somali pirate seizure in the Indian Ocean of an oil tanker from Saudi Arabia that had been headed to New Orleans. Reports that Nigeria-based pirates were extending their reach farther out to sea along another key oil shipping route in the Atlantic also seemed to have little effect on oil markets.
“With so much oil available, that kind of news just doesn’t have the same kind of big effect that it would have had at this time last year, before the global recession hit full force,” said Phil Flynn, an oil analyst at PFCBest Research in Chicago.
