Crude-oil futures fell slightly in Asia Friday, giving up part of
overnight gains as the U.S. dollar's rise against the Japanese yen
crimped buying interest, while investors remained cautious pending
resolution of the U.S. budget crisis.
On the New York Mercantile Exchange, light, sweet crude
futures for delivery in January traded at $87.88 a barrel at 0654 GMT,
down $0.19 in the Globex electronic session. January Brent crude on
London's ICE Futures exchange fell $0.06 to $110.70 a barrel.
The yen fell against major currencies Friday as expectations
of a bolder anti-deflation policy from a post-election government
continued to fuel sales of the Japanese currency.
A stronger U.S. dollar versus major currencies like the yen or
the euro tends to weaken oil prices as its makes oil more expensive for
investors holding those currencies.
Crude futures closed higher overnight, for the first time this
week, riding piggyback on equities on hopes that U.S. lawmakers can
reach an agreement to avoid a so-called fiscal cliff.
While the fiscal debate has dominated price movements of
several assets in recent days, some analysts question whether a
resolution will have a sustainable effect on oil prices that remain
pressured by a global supply glut and declining demand.
"We feel that avoidance of fiscal cliff has been largely
discounted and that any major breakthroughs may simply see a 'buy the
rumor sell the news' scenario unfold," Jim Ritterbusch at Ritterbusch
and Associates said in a note to clients.
Despite a bleak fundamental outlook, Brent crude prices are
currently about 1.80% above last month's closing levels, partly due to
tensions between Israel
and Hamas in Gaza in mid-November fueling supply concerns that have
since dissipated after a negotiated settlement between the two sides.
Nymex reformulated gasoline blendstock for December--the
benchmark gasoline contract--fell 136 points to $2.7734 a gallon, while
December heating oil traded at $3.0375, 31 points lower.
ICE gasoil for December changed hands at $948.00 a metric ton, down $0.75 from Thursday's settlement.