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Oil rises on more Middle East unrest
Source: Agencies |
February 18, 2011, Friday
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BENCHMARK crude settled higher yesterday as protests rocked some Middle East nations and concerns grew about oil supply disruptions.
West Texas Intermediate crude for March delivery rose US$1.37 to settle at US$86.36 a barrel on the New York Mercantile Exchange.
In London, Brent crude fell US$1.19 to settle at US$102.59 a barrel on the ICE Futures exchange, as some traders took profits after recent gains.
Troops and tanks descended on demonstrators in the capital of the Persian Gulf state of Bahrain yesterday. There were reports of a number of dead and injured. Bahrain is not a major oil-producing country, but it is strategically important to the U.S. as home to the Navy's 5th Fleet.
There have also been anti-government protests in Iran, Algeria, Jordan and Libya following the ouster of regimes in Tunisia and Egypt. Iran is the world's fourth-largest oil producer. Algeria and Libya are also important crude suppliers.
"There's a lot of traders concerned about what's going on in the Middle East and North Africa," said Mike Zarembski, senior commodity analyst at brokerage OptionsXpress Inc. He said uncertainty about the Middle East heading into a three-day holiday weekend in the U.S. also contributed to higher prices for benchmark WTI crude.
Recent unrest in the Middle East has had a bigger impact on prices for Brent crude than WTI. Brent is the benchmark price for North Sea oil production, and it is used as a reference price for oil produced in other areas, such as Africa and South America. Production interruptions also have helped keep Brent above US$100 a barrel since the end of January.
WTI hasn't been much higher the US$92 a barrel during the same time. Prices have been weighed down by a glut of inventory at Cushing, Oklahoma, the delivery point for oil contracts traded on the New York Mercantile Exchange. While more North American oil is being produced and delivered to the Cushing facility, existing pipelines can't deliver all of it to refineries.
Energy traders also dealt with a mixed bag of economic news. The U.S. government said that the consumer price index, or inflation rate, rose 0.4 percent last month because of higher food and gas costs. And the Labor Department said 410,000 Americans applied for unemployment assistance last week, an increase of 25,000 from the previous week.
Meanwhile the Federal Reserve Bank of Philadelphia said its index of manufacturing in the mid-Atlantic region last month climbed to the highest level since January 2004, an encouraging indicator for higher oil and gas demand.
In other Nymex trading, natural gas prices fell after the government said supplies in storage fell less than expected last week despite last week's cold weather across much of the country. Natural gas for March delivery lost 5.3 cents to settle at US$3.868 per 1,000 cubic feet.
Heating oil gave up 4.24 cents to settle at US$2.7324 per gallon and gasoline lost 1.70 cents to settle at US$2.5277 a gallon.
West Texas Intermediate crude for March delivery rose US$1.37 to settle at US$86.36 a barrel on the New York Mercantile Exchange.
In London, Brent crude fell US$1.19 to settle at US$102.59 a barrel on the ICE Futures exchange, as some traders took profits after recent gains.
Troops and tanks descended on demonstrators in the capital of the Persian Gulf state of Bahrain yesterday. There were reports of a number of dead and injured. Bahrain is not a major oil-producing country, but it is strategically important to the U.S. as home to the Navy's 5th Fleet.
There have also been anti-government protests in Iran, Algeria, Jordan and Libya following the ouster of regimes in Tunisia and Egypt. Iran is the world's fourth-largest oil producer. Algeria and Libya are also important crude suppliers.
"There's a lot of traders concerned about what's going on in the Middle East and North Africa," said Mike Zarembski, senior commodity analyst at brokerage OptionsXpress Inc. He said uncertainty about the Middle East heading into a three-day holiday weekend in the U.S. also contributed to higher prices for benchmark WTI crude.
Recent unrest in the Middle East has had a bigger impact on prices for Brent crude than WTI. Brent is the benchmark price for North Sea oil production, and it is used as a reference price for oil produced in other areas, such as Africa and South America. Production interruptions also have helped keep Brent above US$100 a barrel since the end of January.
WTI hasn't been much higher the US$92 a barrel during the same time. Prices have been weighed down by a glut of inventory at Cushing, Oklahoma, the delivery point for oil contracts traded on the New York Mercantile Exchange. While more North American oil is being produced and delivered to the Cushing facility, existing pipelines can't deliver all of it to refineries.
Energy traders also dealt with a mixed bag of economic news. The U.S. government said that the consumer price index, or inflation rate, rose 0.4 percent last month because of higher food and gas costs. And the Labor Department said 410,000 Americans applied for unemployment assistance last week, an increase of 25,000 from the previous week.
Meanwhile the Federal Reserve Bank of Philadelphia said its index of manufacturing in the mid-Atlantic region last month climbed to the highest level since January 2004, an encouraging indicator for higher oil and gas demand.
In other Nymex trading, natural gas prices fell after the government said supplies in storage fell less than expected last week despite last week's cold weather across much of the country. Natural gas for March delivery lost 5.3 cents to settle at US$3.868 per 1,000 cubic feet.
Heating oil gave up 4.24 cents to settle at US$2.7324 per gallon and gasoline lost 1.70 cents to settle at US$2.5277 a gallon.
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