Oil little changes as demand concerns offset solid US retail sales report

Oil prices barely budged Thursday as concern about weak demand for gasoline and diesel fuel offset solid U.S. retail sales data.

Benchmark West Texas Intermediate crude for January delivery rose six cents to close at US$97.50 on the New York Mercantile Exchange.

The market was buoyed somewhat after the U.S. Commerce Department said retail sales rose 0.7 per cent in November. It was the biggest gain in five months and suggested consumer spending would increase over the winter season.

But there was lingering concern about fuel demand a day after the Energy Department said U.S. gasoline and distillate supplies increased last week more than three times what analysts had been expecting.

Markets will be looking for fresh direction from next week’s policy meeting of the U.S. Federal Reserve. There are increasing expectations that the Fed will start to cut back its monetary stimulus, which has helped push investors to commodities like oil in search of profits outpacing low bonds yields.

In other markets, Brent crude, a benchmark for international oil, was down 74 cents at US$108.96 a barrel on the ICE exchange in London.

Among other energy futures trading on the Nymex, wholesale gasoline fell three cents to US$2.63 a U.S. gallon (3.79 litres), heating oil lost four cents to US$2.98 a gallon and natural gas rose seven cents to US$4.41 per 1,000 cubic feet.

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