* Oil closes 78 percent higher than Dec. 31, 2008
* Oil posts biggest annual gain since 1999
(Updates prices at settlement, adds yearly price changes)
By Edward McAllister
NEW YORK, Dec 31 (Reuters) - Oil finished the year above
$79 a barrel on Thursday, climbing a whopping 78 percent in
2009 and notching the biggest annual gain in a decade.
The market roared back from depressed levels seen at the
end of 2008 that came as the global economic crisis sapped
demand.
U.S. crude for February delivery <CLc1> settled up 8 cents
at $79.36 a barrel, compared with a close of $44.60 on Dec. 31,
2008. London Brent crude <LCOc1> fell 10 cents on Thursday to
settle at $77.93.
This year's rise in U.S. oil futures is the sharpest annual
percentage gain since 1999, when output cuts by producers
helped revive prices from lows near $10 a barrel.
Oil on Thursday was still almost half the all-time high of
$147.27 hit in July 2008.
After sliding to a five-year low under $33 at the end of
2008, oil prices staged a steady climb to a high of $82 in
October this year. The annual average 2009 price was $62,
broadly in line with analysts' predictions at the end of 2008
of $58.48.
Crude was supported on Thursday by data from the U.S.
Energy Information Administration (EIA) that showed declines in
crude oil stockpiles last week, boosting expectations of demand
recovery in the world's largest energy user. []
"Momentum seems to run out near $80 as market participants
ponder the conundrum of whether or not a sustainable recovery
is actually underway," Mike Fitzpatrick, vice president at MF
Global in New York, said in a note.
Oil's rise of nearly 80 percent this year was part of a
broad-based rally across commodities and equities as investment
returned to markets drained by the global economic recession.
"While it was nominally a very strong year for commodities,
it was a relative weak year for passive investors," said
Olivier Jakob, oil analyst at Petromatrix.
For a FACTBOX on global market losses and gains for 2009,
click []
Next year, analysts expected oil prices to consolidate this
year's gains as demand continues its gradual recovery.
"TRANSITION" IN 2010
"We expect 2010 to be a year of transition between the
demand concerns of 2009 and the supply concerns of 2011, with
in addition geopolitical developments having a heightened
importance," Barclays Capital said in a research note.
U.S. crude stockpiles fell by 1.5 million barrels in the
week to Dec. 25, just off an expected 2 million-barrel decline,
while gasoline inventories showed a surprise decline, data from
the EIA showed on Wednesday.
Crude inventories have slid by 19.5 million barrels in the
past four weeks, eroding the excess supply to 50.1 million
barrels, although stocks were still far above normal levels.
There were signs on Thursday that crude oil supplies from
some areas were on the rise as OPEC output hit a 2009 high in
December, led by increases in Nigeria and smaller rises
elsewhere, a Reuters survey showed. []
For a graphic showing how the 19 commodities that make up
the CRB index have performed, see :
http://graphics.thomsonreuters.com/129/CMD_RCRB1209.gif
(Additional reporting by Joe Brock in London and Ramthan
Hussain in Singapore; Editing by Christian Wiessner)
