Crude oil prices slide down

Oil futures went down Thursday as investors sold to lock in profits from the previous session's big gains.

Photo: Crude oil prices slide down

Crude prices spiked 5 percent on Wednesday, but two causes of that swing evaporated Thursday when the dollar strengthened and Exxon Mobil Corp. said a Texas refinery suffered no production outages from a fire.

Many analysts argued that Wednesday's gains were not justified by any fundamental news, including a government report that inventories fell last week.

"We were just overcooked yesterday," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Indeed, an increase in oil supplies at the New York Mercantile Exchange delivery terminal in Cushing, Oklahoma, has pushed the price of January crude below the price of February crude, the first time since August that the price of a front-month contract has fallen below that of a later contract. That price relationship is seen as an indication that oil supplies are rising, and that prices will fall.

Light, sweet crude for January delivery fell $1.69 to $92.70 a barrel on the New York Mercantile Exchange. February crude fell $1.48 to $92.80 a barrel. On Wednesday, January crude prices jumped $4.37 to their highest close since Nov. 27.

A firming in the dollar Thursday neutralized one of the reasons many analysts have cited for oil's run last month to $99 a barrel. Oil futures offer a hedge against a weak dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.

Other energy futures also fell Thursday. January heating oil fell 1.69 cents to $2.6263 a gallon, and January gasoline fell 3.78 cents to $2.375 a gallon. January natural gas futures fell 8.7 cents to $7.321 per 1,000 cubic feet as investors shrugged off a government report that inventories fell by 146 billion cubic feet last week, slightly more than expected by analysts surveyed by Dow Jones Newswires.

In London, January Brent crude fell $1.30 to $92.72 a barrel on the ICE Futures exchange.