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CRUDE oil futures jumped yesterday on supply concerns, stoked by a new round of Turkish airstrikes in northern Iraq and a growing belief that US oil inventories fell last week. Turkey's military said its warplanes bombed eight suspected Kurdish rebel positions in northern Iraq on Wednesday. It was the third Turkish strike inside Iraq in less than two weeks. Iraq produced 2.32 million barrels of oil a day in November, according to the International Energy Agency, or about 2.7 percent of the world's oil supply. As much as 400,000 barrels a day is exported north across Iraq's border with Turkey, and the air assaults raise the risk of retaliatory strikes against oil infrastructure, analysts said. "People are nervous about a possible disruption of supply on some important pipelines" in the area, Mike Fitzpatrick, an analyst at MF Global in New York, told Dow Jones Newswires. The new attacks came as oil investors awaited inventory data from the Energy Department's

OIL prices drifted higher in light holiday trading yesterday after predictions of a drop in crude inventories raised new supply concerns. With little other news to motivate buying or selling, investors focused on forecasts by analysts including Addison Armstrong, director of exchange traded markets at TFS Energy Futures LLC, who predicted crude inventories fell by 1.5 million barrels last week. Tim Evans, an analyst at Citigroup Inc, predicted that crude stocks fell by 2 million to 3 million barrels. The Energy Department's Energy Information Administration reports oil inventories on Thursday this week, a day late due to Christmas. Light, sweet crude for February delivery rose 82 cents to settle at US$94.13 a barrel on the New York Mercantile Exchange after falling as low as US$92.50 earlier. Prices rose more than US$2 on Friday after the government reported consumer spending jumped more than expected in November, raising hopes that the economy will weather the crisis roiling

OIL prices jumped in light trading yesterday after the government reported that consumer spending surged last month, raising hopes that the US economy will weather the crisis roiling credit markets and that demand for oil and gasoline will strengthen. The Commerce Department said consumer spending jumped 1.1 percent in November, the biggest one-month gain since 2004 and well above analyst expectations for an 0.7 percent increase. Light, sweet crude for February delivery rose US$2.25 to settle at US$93.31 a barrel on the New York Mercantile Exchange. Oil prices were also supported by stocks, which rose yesterday, and a slightly weaker dollar. Energy investors often view stock market moves as reflective of overall economic sentiment. Also, 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. Many observers blame oil's rise last month to near US$100 on speculators

NEW YORK (MarketWatch) -- The dollar strengthened against other major currencies early Friday, getting a boost after the Labor Department reported hotter-than-expected consumer price inflation for November. The dollar rose 0.7% against the yen at 113.07 yen. The euro gave up 1% at $1.4491. The dollar index, which tracks the performance of the greenback against a basket of other major currencies, rose 0.8% at 77.145. The consumer price index increased 0.8%, driven by a 5.7% gain in energy prices, the biggest gain in consumer prices in more than two years. Core inflation, which excludes food and energy prices, rose 0.3%, the biggest gain since January. The numbers were worse than expected. Economists were forecasting the CPI to rise 0.7% and the core rate to rise 0.2%, according to a survey conducted by MarketWatch.

CRUDE oil fell below US$90 a barrel on Friday in the biggest weekly loss in two and a half years on concern that slowing economic growth will cut energy demand. Saudi Oil Minister Ali al-Naimi said supplies in the market were "ample." Consumer spending in the US rose less than forecast in October and incomes increased at the slowest pace in six months, the United States' Commerce Department said in Washington. Al-Naimi, speaking in Doha, said oil prices didn't reflect actual production and consumption trends, Bloomberg News reported. "The market is simply becoming more concerned about a possible recession that could reduce petroleum demand," said James Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. "We have been seeing evidence for some time of a weakening economy and weakening oil demand." Crude oil for January delivery fell US$2.30, or 2.5 percent, to settle at US$88.71 a barrel at 2:45pm on the New York Mercantile

CRUDE oil futures closed down in choppy trading yesterday, failing to breach US$100 a barrel after the government reported that crude oil inventories at a key Midwest oil terminal rose for the first time in weeks. The news helped offset the market impact of an overall drop in crude oil stocks. Light, sweet crude for January delivery fell 74 cents to settle at US$97.29 a barrel on the New York Mercantile Exchange. Stocks of distillates, including heating oil, also dropped more than expected last week, the Energy Department's Energy Information Administration reported. That could mean more bad news for heating oil customers already expecting costs to rise 22 percent this winter. Heating oil futures fell 0.27 cent to settle at US$2.6874 a gallon on the New York Mercantile Exchange after earlier hitting US$2.7154, a new record. Crude prices -- which rose as high as US$99.29 on the New York Mercantile Exchange earlier Wednesday and broke the previous intraday record of US$98.62

ENERGY futures fell yesterday after the government reported unexpected increases in crude oil and gasoline inventories last week and OPEC forecast fourth-quarter demand for oil would be less than expected. In its weekly inventory report, the Energy Department's Energy Information Administration said oil inventories rose by 2.8 million barrels during the week ended November 9. Analysts surveyed by Dow Jones Newswires, on average, had expected a decline of 300,000 barrels. That helped send light, sweet crude for December delivery falling 66 US cents to settle at US$93.43 a barrel on the New York Mercantile Exchange after trading off more than US$2 a barrel earlier. Crude prices have been volatile this week, falling more than US$3 on Tuesday and rising more than US$2 on Wednesday after hitting a record of US$98.62 one week ago. The drop in crude was limited, however, by an unexpectedly large drop in heating oil supplies, a mixed report on Iran's compliance with UN demands over

WASHINGTON - U.S. inflation last month continued to accelerate at a pace that may limit the Federal Reserve's room to cut interest rates in 2008. Consumer prices rose 0.3 percent in October, the Labor Department said Thursday, matching economists' forecasts. Prices were 3.5 percent higher than a year earlier, the biggest 12-month increase since August 2006. "There are no alarm bells going off today, but neither does it provide any wiggle room to cut rates," said Julia Coronado, a senior economist at Barclays Capital Inc. in New York. Policymakers "have to take the inflation threat seriously.

NEW YORK Wall Street plunged in early trading today as surging oil prices and slower growth in consumer spending erased optimism about the Federal Reserve's positive take on the economy just a day earlier. The Dow Jones industrials skidded more than 200 points. Inflation fears revived as crude oil vaulted to a record $96 a barrel. Meanwhile, a report from the Commerce Department indicated consumers scaled back their spending in September as worries mounted about a worsening housing market and further credit market turmoil. That combination led investors to retreat from Wednesday's rally,

NEW YORK - Wall Street closed slightly lower in erratic trading Thursday as investors uneasy about the credit markets and record-high oil prices took little solace from reports on new home sales and durable goods orders. The Commerce Department said sales of new homes rose 4.8 percent in September from August's levels. The market initially popped on the data, as economists had predicted a decline. But it eventually pulled back because the sales increase was caused by a big downward revision in August's decline, and because home builders had offered discounts in September to move inventory. "

OIL futures retreated from a record US$89 a barrel yesterday, ending lower after government data showing larger-than-expected gas and oil supplies outweighed worries about tension in northern Iraq. Trading was volatile throughout the session as oil futures were buffeted by a number of headlines, including news that Turkey's parliament approved a government plan to attack Kurdish rebels in northern Iraq and word of an explosion at a small refinery in Montana. Reports by the Energy Department, the International Energy Agency and the Organization of Petroleum Exporting Countries over the past week have all supported a view that oil supplies are falling as demand is growing. But the Energy Department's inventory report yesterday countered those perceptions. "Inventories are rising, not falling," said Tim Evans, an analyst at Citigroup Inc. in New York. "Demand is falling, not rising." Light, sweet crude for November delivery fell 21 cents to settle at

PRICES paid by US consumers rose more than forecast in September as food and energy costs climbed, while the core measure that excludes those items showed inflation remains contained. The 0.3-percent gain followed a 0.1-percent decline in August prompted by falling oil prices, the Labor Department said yesterday in Washington. So-called core prices rose 0.2 percent for a second month in line with forecasts. With inflation under control, Federal Reserve policy makers have leeway to consider cutting their benchmark rate again later this month to keep the economy growing in the face of a deepening housing recession. Fed Chairman Ben S. Bernanke this week reiterated the central bank would "act as needed" to foster sustainable growth along with price stability, Bloomberg News said. "A slower economy and additional slack in the labor market should help keep inflation under control," Ethan Harris, chief economist at Lehman Brothers Holdings Inc in New York, said

OIL futures surged yesterday in a late rally driven by news that workers at Chevron Corp. facilities in Nigeria had staged a surprise strike and by a report that demand for gasoline is up. Nigeria is Africa's biggest oil producer and one of the top overseas suppliers to the United States. Oil prices often rise when Nigerian oil supplies are threatened. "Employees of some of the companies providing labor workforce to Chevron, and belonging to the National Union of Petroleum and Natural Gas Workers ... initiated (a) strike" at six facilities, Chevron said in a statement. Chevron said production was unaffected. It was unclear how long the strike might last. Nigerian oil workers have a history of striking frequently, but returning to work quickly. Prices were also supported by a MasterCard Advisors LLC report that concluded gasoline demand rose 1.3 percentage points last week compared to the same week last year. Light, sweet crude for November delivery rose US$1.04 to settle at US$81.30 a barrel on the New York Mercantile Exchange. November gasoline rose 1.34 US cents to settle at US$2.0336 a gallon while Nymex heating oil rose 3.19 US cents to settle at US$2.2172 a gallon. November natural gas rose 14.7 US cents to settle at US$7.01 per 1,000 cubic feet on expectations that this winter will be colder than last. In London, November Brent crude rose US$1.11 to settle at US$78.60 a barrel on the ICE Futures exchange. The news from Nigeria and MasterCard interrupted what had been a sleepy day in the Nymex energy futures pits. With little news driving prices earlier in the day, futures had alternated between gains and losses as traders debated whether Thursday's inventory report from the Energy Department's Energy Information Administration will show an increase in crude stockpiles. The report will be released a day later than normal due to Monday's Columbus Day holiday. "The market was starving for some news," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. Analysts surveyed by Dow Jones Newswires predict, on average, that crude oil inventories rose 1 million barrels during the week ended Oct. 5, while refinery use fell 0.1 percentage point to 87.4 percent of capacity. Gasoline inventories fell by 300,000 barrels last week, the analysts predict, while distillates, which include heating oil and diesel fuel, likely declined 600,000 barrels. However, a consensus is far from clear, with some

OIL futures rose sharply yesterday after the government predicted that a colder winter ahead will help lift worldwide demand for crude during the fourth quarter. In a monthly report, the Energy Department's Energy Information Administration estimated that global demand for oil will be 1.8 million barrels a day higher in the fourth quarter than it was during the same period last year. The report follows a prediction Thursday from the US National Oceanic and Atmospheric Administration that temperatures in the US will be 1.3 percent colder than last year, although they'll be 2.8 percent warmer than average. "Initially, traders are relying on the Energy Information Administration (report)," said Tim Evans, an analyst with Citigroup Inc. in New York. However, Evans also said of Tuesday's trading, "I think there may (also) be a technical element to this." Oil prices declined more than US$2 a barrel on Monday, and have been volatile in recent days. Analysts say investors are engaged in a battle over whether oil supplies are adequate to meet fourth quarter demand. Some investors feel prices have peaked for the year and are due to begin a seasonal decline, while others feel prices could rise again and set new records. When prices held above US$78 on Monday, that may have emboldened some of the more bullish investors to try to push prices to new highs, Evans said. Light, sweet crude for November delivery rose US$1.24 to settle at US$80.26 a barrel Tuesday on the New York Mercantile Exchange, while gasoline futures rose 2 cents to settle at US$2.0202 a gallon. November heating oil rose 2.57 cents to settle at US$2.1853 a gallon, while natural gas for November rose 1.7 cents to US$6.863 per 1,000 cubic feet. In London, November Brent crude rose 91 cents to settle at US$77.49 a barrel on the ICE Futures exchange. At the pump, meanwhile, gas prices slipped 0.2 cent overnight to a national average of US$2.765 a gallon, according to AAA and the Oil Price Information Service. Retail prices have slid in recent weeks as consumer demand for gasoline has fallen. In addition to reacting to Tuesday's EIA predictions about future demand, traders are anticipating Thursday's EIA report on petroleum inventories. Crude oil inventories are expected to have gained 1 million barrels in the week ended Oct. 5, according to a Dow Jones Newswires survey of analysts, while refinery use is expected to have fallen by 0.1 percentage point to

THE widening gap between crude oil and the relatively low price of gasoline is signaling the first quarterly decline in oil prices in a year. While oil has fallen in the fourth quarter during 13 of the past 20 years because of the transition from peak summer demand, the pressure for another drop in the months ahead is the most intense since 2004 and may defer any rebound to record crude prices until the first half of 2008. Citigroup Inc, Deutsche Bank AG and HSBC Holdings Plc anticipate that oil will slide from last month's record US$83.90 a barrel as gasoline sales weaken to the lowest level this year and a slowing US economy curbs demand. Profits from making fuels are so low that refiners have 12.5 percent of capacity off line, the second-highest rate of the past two decades for this time of year, data from the US Department of Energy show. "Refinery profit margins are being squeezed at a time when significant maintenance is scheduled," said Tim Evans, an energy analyst with Citigroup Global Markets Inc in New York. "The combination of these factors should send crude oil lower." Oil traders and analysts have never been more pessimistic, with 75 percent of respondents anticipating prices will fall, according to a weekly survey by Bloomberg News that started in April 2004. Crude may end the year below US$70 a barrel, compared with US$81.66 at the end of the third quarter, according to a forecast by Adam Sieminski, a global oil analyst at Deutsche Bank in New York. If he's right, a US$1 million investment in crude oil futures in New York would more than double to US$2.3 million, assuming speculators used the exchange's minimum deposit to conduct the transaction. Not everyone forecasts that oil will move lower by the end of the year. Goldman Sachs Group Inc is the most bullish commodities trading firm on oil, forecasting on September 17 that crude will end the year at US$85 a barrel, with a "high risk" of a jump above US$90, according to a report from analysts including Jeffrey Currie in London. Its two current trading recommendations on oil are both money-losers. One of them was to buy the gasoline refining margin, which has lost more than half its value since then, Goldman's research shows.

ENERGY futures fell yesterday as traders expecting a weakening of demand in the coming months cashed in profits from the previous session's rally. While an encouraging employment report suggested the economy is weathering the problems affecting the subprime mortgage industry, many energy traders and analysts question whether demand for oil and petroleum products will be strong enough in the fourth quarter to support US$80 a barrel oil. Others argue that demand for oil will increase as home heating season progresses. While crude inventories have risen for two straight weeks, supplies of gasoline and distillates including heating oil fell last week. Investors betting demand will tighten in the fourth quarter drove oil prices US$1.50 higher on Thursday. Yesterday, light, sweet crude for November delivery fell 22 cents to settle at US$81.22 a barrel on the New York Mercantile Exchange. Futures ended the week down 44 cents a barrel, or 0.5 percent. Trading yesterday was volatile, with prices alternately rallying and falling. "There's profit-taking going on after yesterday's rally," said Addison Armstrong, an analyst with TFS Energy Futures LLC in Stamford, Connecticut. The quick resolution of many of Thursday's West Coast refinery outages also pressured prices yesterday. November gasoline fell 0.29 cent to settle at US$2.0493 a gallon on the Nymex, ending the week down 1.9 cents, or 0.9 percent. Heating oil futures fell 0.78 cent to settle at US$2.2235 a gallon. Both contracts surged more than 5 cents on Thursday. Natural gas for November delivery fell 33.9 cents to settle at US$7.073 per 1,000 cubic feet. Forecasters see little chance that a series of storms strung from the Gulf of Mexico to the central Atlantic will develop into tropical storms that could threaten critical gas and oil infrastructure. In London, November Brent crude fell 7 cents to settle at US$78.90 a barrel on the ICE Futures exchange. Oil prices have been volatile in recent days as investors have battled over whether demand will grow or weaken in the fourth quarter. "It's a stalemate right now," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "People really don't know what the next move will be." Energy Department data suggests demand for gasoline is falling, and many analysts think that's a function of this year's record gas prices. But others argue that falling refinery activity and heating oil inventories sugg

OIL prices rose for the first time in four sessions yesterday as investors questioned whether supplies of crude, gasoline and heating oil are adequate to meet demand. With heating season about to begin, investors are betting demand for crude oil will jump as refineries start producing more heating oil. And refineries that are focused on heating oil will be turning out less gasoline. The Energy Department on Wednesday reported that crude inventories rose by 1.2 million barrels last week, while supplies of distillates including heating oil fell by 1.2 million barrels. Gasoline supplies fell by 100,000 barrels. Traders view that increase in crude supplies as inadequate, said James Cordier, president of Liberty Trading Group in Tampa, Florida. "That's nothing," Cordier said. "We expect to see figures of 3 (million) and 5 (million) barrels." Light, sweet crude for November delivery rose US$1.50 to settle at US$81.44 a barrel on the New York Mercantile Exchange after falling more than US$1 earlier. Crude's uncertain direction early in the day reflected a battle between investors betting that demand will tighten, and those who feel oil has peaked and begun a seasonal decline. "This market is going to break seasonally or the global economy is going to find (oil prices are) a bargain," Cordier said. Oil prices also drew support from heating oil and gasoline futures. Nymex heating oil rose 5.26 cents to settle at US$2.2313 a gallon, while November gasoline rose 5.63 cents to settle at US$2.0522 a gallon. Prices of both were supported by the inventory declines and several minor refinery outages on the West Coast. November natural gas rose 13.5 cents to settle at US$7.412 per 1,000 cubic feet. The Energy Department reported that natural gas inventories rose by 57 billion cubic feet last week, less than the 65 billion-cubic-foot increase analysts forecast. Some analysts said a smattering of weather systems strung from the Gulf of Mexico to the central Atlantic were supporting natural gas prices, though none of the storms are expected to develop quickly into subtropical or tropical storms and threaten critical gas and oil infrastructure in the Gulf. In London, November Brent crude rose US$1.78 to settle at US$78.97 a barrel on the ICE Futures exchange. Some analysts think this year's record gas prices are affecting demand, which fell last week. But prices will remain high if supplies continue falling. In the

OIL prices fell today in Asia, extending a decline from the previous session that came after an unexpected increase in US crude oil inventories. Light, sweet crude for November delivery fell 28 cents to US$79.66 a barrel in Asian electronic trading on the New York Mercantile Exchange by midday in Singapore. The Nymex crude contract fell 11 cents to settle at US$79.94 a barrel in yesterday's floor session. Crude oil futures have fallen four straight days after trading at near record levels last week. The weekly inventory report from the US Energy Department's Energy Information Administration was mixed, analysts said. Crude oil supplies unexpectedly rose in the week ended Sept. 28. Gasoline and distillate inventories unexpectedly fell. And while the drop in gasoline supplies is supportive, demand for the fuel is falling, and that will pressure gasoline prices and crude futures down the road, analysts said. The EIA said in its report that crude supplies rose 1.2 million barrels last week. Analysts surveyed by Dow Jones Newswires, on average, had predicted that inventories fell 400,000 barrels. One million barrels of that increase were on the West Coast, the EIA said. Oil and gas infrastructure there is isolated from the rest of the country, though, and that might mean shortages elsewhere would support prices. Gasoline inventories fell 100,000 barrels last week, while supplies of distillates, which include heating oil and diesel fuel, fell 1.2 million barrels. Analysts had expected gasoline inventories to grow 400,000 barrels, and distillate supplies to increase 700,000 barrels. Refinery utilization rose by 0.6 percentage points to 87.5 percent of capacity. Analysts had expected an 0.4 percentage point increase. Oil's true value is closer to US$65 a barrel, said Tim Evans, an analyst at Citigroup Inc in New York, instead of at the near US$80 a barrel or higher range it has been trading. Many analysts feel oil prices have been driven up by speculative buying, and they argue that the market's underlying supply and demand fundamentals do not support the record prices of recent weeks. However, while many analysts expect oil prices to begin a seasonal decline into winter, few are willing to predict when that slide will begin. Oil prices normally drop off every year in the period between the northern summer driving season and the US and European winter. November Brent crude fell 23 cents to US$76.95 a barrel on the ICE futures

CRUDE oil may decline on speculation that near-record prices are unjustified because of rising US inventories and increased OPEC output. Twenty-three of 32 analysts surveyed, or 72 percent, said oil prices will fall from October 5, the most bearish response since the survey began in April 2004, Bloomberg News reported. Five, or 16 percent, said prices will increase and four said there will be little change. Last week, 59 percent of respondents said prices would fall. US crude-oil inventories rose 1.84 million barrels in a week, the Energy Department said in a report on September 26. The gain left supplies 8.5 percent higher than the five-year average for the period, the department said. Stockpiles at Cushing, Oklahoma, where New York-traded West Texas Intermediate oil is delivered, dropped 209,000 barrels, the report said. "While the market may be vulnerable to a squeeze based on low physical inventories at Cushing, Oklahoma, overall US commercial crude-oil stocks are comfortably above their five-year average," said Tim Evans, an analyst with Citigroup Global Markets Inc in New York. "It also looks like OPEC production is rising and the fourth-quarter demand may be revised lower." The Organization of Petroleum Exporting Countries agreed on September 11 to produce an extra 500,000 barrels a day starting in November. World oil demand peaks in the fourth quarter when refiners make heating fuel for the Northern Hemisphere winter. Crude oil for November delivery rose four cents to US$81.66 a barrel last week on the New York Mercantile Exchange. Friday's close was the second-highest since trading began in 1983.

OIL futures fell yesterday as a late flurry of selling overcame an earlier rally driven by the steadily weakening dollar. Early in the day, crude prices rose to near record levels as the dollar's drop against other currencies sparked buying by investment funds. But in the midst of that rally, analysts noted that oil's fundamentals are weak. Many believe it is only a matter of time before oil begins a seasonal price decline. Light, sweet crude for November delivery fell $1.22 to settle at $81.66 a barrel on the Nymex, giving back nearly half of the $2.58 the contract gained on Thursday. Prices rose as high as $83.76 early in the day. Oil prices peaked at a record $83.90 last week before retreating below $80 a barrel early this week. When an Energy Department report on Wednesday showed crude inventories rose last week, countering expectations for a decline, prices fell below $79 _ but then rebounded late in the day. "There's definitely been a flow of fund buying here," said Tim Evans, an analyst at Citigroup Inc. in New York. Oil and other commodities denominated in dollars are actually falling in price in the eyes of foreign investors. That's because the dollar has been sliding against other currencies since the Federal Reserve cut interest rates last week. The dollar fell further yesterday on expectations that the weak U.S. economy means another rate cut is coming. Buying by foreign investors precipitates new investment by domestic traders betting the added demand will boost prices. But Evans and other analysts argue that market fundamentals do not support such high prices. Oil inventories are falling, but that's typical for this time of year, Evans said. Oil inventories are 1.3 percent below year-ago levels, but oil's price is more than $20 a barrel higher, he said. And high oil and gas prices are depressing demand, Evans added. Stephen Schork, an analyst and trader in Villanova, Pennsylvania, argued that many funds bought oil futures this week to pad their results for the third quarter, which ends yesterday. "Hedge fund managers ... went window shopping in the (New York Mercantile Exchange crude) pit to dress up their end-of-quarter marks," Schork said in his daily Schork Report research note. "We are more interested to see how the fourth quarter begins on Monday rather than how the third quarter ends today." While Nymex crude rallied late in the week, oil prices ended the week flat, up just 4 c