What's Moving the Oil Markets?

•Global crude futures were rangebound Friday morning, on the last day of trading in 2006, amidst very thin trading, and largely ignoring a significant draw in US crude stocks on Thursday, brokers said. Market players said that there is very little activity and what trading there is is book squaring ahead of the end of 2006.

•On Thursday, the US Energy Information Administration reported an 8.1 million barrel drop in commercial crude stocks, much higher than the 2.4 million barrel draw analysts had projected and the 2.1 million barrel drop reported by the American Petroleum Institute.

•Despite the large draw in crude stocks, futures prices, albeit volatile, did not rally. The decline in crude stocks primarily occurred in the Midwest, where inventories dropped 7.5 million barrels. "This is presumably the result both of crude that would normally have flowed north being diverted (at Midland in particular), down towards the coast, as well as delays from the Gulf of scheduled pipeline deliveries of Midwest-bound imports," Paul Horsnell and Kevin Norrish, energy analysts at Barclays Capital, said in a report.

Updated: 12/29/07