Manufacturing in the U.S., the biggest energy user, shrank in December at the fastest pace in almost three decades as the recession deepened and spread overseas. Oil climbed on Dec. 31 as U.S. fuel supplies rose less than expected, and as the conflict in Gaza raised concern that Middle East supplies would be cut and Russia threatened to cut natural-gas shipments to Ukraine.
Crude oil for February delivery fell 28 cents, or 0.6 percent, to $44.32 a barrel at 10:26 a.m. on the New York Mercantile Exchange. Oil dropped 54 percent last year, the first annual decline since 2001 when crude slipped 26 percent, and the biggest loss since trading began in 1983.
The Institute for Supply Management’s factory index fell to 32.4, less than forecast and the lowest level since 1980, from 36.2 the prior month, the Tempe, Arizona-based private group said today. Readings less than 50 signal contraction. The group’s price measure fell to the lowest level in almost six decades.
Israel yesterday killed a Hamas leader in its assault on the Gaza Strip and Foreign Minister Tzipi Livni said her nation would keep pressure on the militant Islamic group. An army spokesman, speaking anonymously in accordance with regulations, said warplanes hit Hamas leader Nizar Rayyan’s house in the Jabaliya refugee camp.
Russia and Ukraine prepared to resume talks in their dispute over natural-gas prices after OAO Gazprom cut supplies for the second time in three years. Ukrainian President Viktor Yushchenko said yesterday the two sides are near a compromise, urging state utility NAK Naftogaz Ukrainy and Gazprom, Russia’s gas exporter, to meet again in the next one or two days.
Russian crude oil exports increased 10 percent in December after the government reduced duties. Shipments climbed to 5.38 million barrels a day, from 4.89 million a day in November, according to data released today by the Energy Ministry’s CDU-TEK unit. December deliveries were up 0.2 percent from the same month of 2007.
South Korea bought less oil from overseas suppliers in 2008 and may cut back further this year as the global economic slowdown cools in the world’s fifth-biggest crude importer. Deliveries dropped to 865.3 million barrels last year from 872.5 million barrels in 2007, the Ministry of Knowledge Economy said in a statement today.
The Standard & Poor’s GSCI Index of 24 commodity futures lost 43 percent last year, the most since its introduction in 1971. The Reuters/Jefferies CRB Index of 19 raw materials dropped 36 percent, the biggest plunge since 1957.
Brent crude oil for February settlement declined $1.16, or 2.5 percent, to $44.43 a barrel on London’s ICE Futures Europe exchange.