Crude oil prices up 20 cents at US$90.86 a barrel, but still near 2012 lows

NEW YORK, N.Y. – The price of oil held near the lowest levels of the year on a quiet Friday ahead of the U.S. Memorial Day holiday weekend.

Benchmark West Texas Intermediate crude added 20 cents to finish the week at US$90.86 per barrel on the New York Mercantile Exchange.

Brent crude, used to price varieties imported by U.S. refineries, rose by 28 cents to end at US$106.83 per barrel in London.

Both crude varieties have tumbled this month on forecasts of weaker world demand and higher supplies. U.S. crude closed Wednesday at $89.90, its lowest close since October.

Prices fell in May as the economies of the two biggest oil consumers — the U.S. and China — showed signs of slowing. And many analysts are betting that the European Union will fall into a recession as it struggles with massive government debts.

Meanwhile, some of the world’s largest oil producing countries have been exporting more crude this year, boosting supplies.

Iran also appears to be interested in defusing tensions over its nuclear program, which critics contend is aimed at building a nuclear weapon, an allegation Tehran denies.

Tough talk between Iran and the West pushed oil prices higher earlier this year and while negotiations this week made little progress, Tehran and several western countries, including the United States, agreed to further talks. Analysts consider that a promising sign.

Gene McGillian, a broker and oil analyst at Tradition Energy, said many investors will avoid making new bets on oil until they get an updated look at the U.S. economy. They’ll likely wait for next week’s reports on employment, personal incomes and housing, McGillian said.

“People also will be looking to see if we’ll have a pickup in gasoline demand following the Memorial Day weekend,” he said.

In other futures trading, natural gas fell by 7.9 cents, or three per cent, to finish at US$2.568 per 1,000 cubic feet. Analysts cited government weather forecasts that show temperatures next week could be lower than previously expected. If the weather is cool, fewer people will use their air conditioners, and that will lower demand for natural gas-generated electricity.

Heating oil added about a penny a piece to finish at US$2.8288 a U.S. gallon (3.79 litres) and wholesale gasoline increased by 1.64 cents to end at US$2.8929 a gallon.