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Page added on December 31, 2008

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Oil out with a bang with 14% spike

Crude prices rally near the close of trade as Russia moves to cut off natural gas supplies to Ukraine.

NEW YORK ( — The price of oil jumped Wednesday, capping a volatile year with a swing of $7 from the session low to the close, as investors responded to news of a possible supply disruption in Europe.

Light, sweet crude for February delivery rose $5.57, or 14.2%, to settle at $44.60 a barrel on the New York Mercantile Exchange.

2009: Looking ahead, analysts say oil could rebound next year.

“So much of the dim economic outlook is priced in,” said John Kilduff, an energy analyst at MF Global in New York. “Things should look up next year.”

Falling prices have caused many oil companies to limit their investments in new exploration projects, which could result in another supply shock next year, Kilduff added.

“The supply picture could tighten quickly,” he said. “With various projects being scrapped or tabled, we may end up paying for that later.”

CNN Money

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