The Shadow
NEW YORK (AP) – Energy prices flattened Tuesday with a majority of futures traders taking the holiday week off, though a stronger dollar helped keep a barrel of oil below $79.
By early afternoon, benchmark crude for February delivery added a penny to $78.78 a barrel on the New York Mercantile Exchange. In London, Brent crude for February delivery increased 25 cents to $77.57 a barrel on the ICE Futures exchange.
A rise in the dollar versus other currencies tends to push oil prices lower. Crude barrels are priced in dollars, and investors holding foreign money can’t buy as much when the dollar rises.
Still, oil has pressed higher for four straight days. Crude barrels are rising close to the high for the year of $82 a barrel, and that’s tugging other fuels higher as well.
When the new year begins, analyst and trader Stephen Schork said he’ll be closely watching profit margins for oil refiners. Crude prices have surged this year despite a drop in American consumption. If refiners can’t pass along those higher costs with more expensive gasoline, then Schork said he’ll brace for a correction in oil prices.
“Refiners have a difficult row to hoe right now,” he said. “These guys can’t make money. They can’t pass on the exaggerated cost of crude to consumers. Some are trying to sell their refineries, and they’re not getting any takers.
“But unless you have a massive rally in the dollar, I don’t think you’ll get the correction in crude oil,” Schork said.
In other Nymex trading in January contracts, heating oil rose 3.05 cents to $2.104 gallon while gasoline gave up less than a penny to $2.0131 a gallon. Natural gas fell 9.9 cents to $5.891 per 1,000 cubic feet.
