SAN FRANCISCO (MarketWatch) — Oil futures settled above $108 a barrel Thursday as the increased likelihood of a U.S. military strike on Syria raised concerns over supplies in the Middle East and as data showed a sizable decline in last week’s U.S. crude inventories. Natural-gas prices closed at a more than one-week low after a report revealed an increase in supplies at the high end of market expectations. Oil for October delivery CLV3 +0.01% gained $1.14, or 1.1%, to settle at $108.37 a barrel on the New York Mercantile Exchange. On Wednesday, oil settled 1.2% lower for its third down day in four sessions. Oil inventory numbers were basically in line with expectations, said Tariq Zahir, managing member at Tyche Capital Advisors. “Oil has rebounded from the initial selloff we saw right after the numbers came out.” Friday’s U.S. monthly jobs numbers “could potentially move the energy markets,” he said, “but the main focus is and still will be Syria.” The U.S. Energy Information Administration reported that crude stockpiles for the week ended Aug. 30 fell 1.8 million barrels. Analysts polled by Platts were looking for a larger decline of 2.5 million barrels. Gasoline supplies also fell by 1.8 million barrels, while distillate stockpiles rose 500,000 barrels, the EIA said. Gasoline stockpiles were expected to decline by 1 million barrels, while forecasts called for an increase of 800,000 barrels for distillates, which include heating oil. On Nymex, October gasoline RBV3 -0.16% fell almost 3 cents, or 1%, to $2.84 a gallon, while October heating oil HOV3 -0.06% edged up by less than 0.1% to $3.14 a gallon. Oil stocks at Cushing, Okla., the delivery point for Nymex oil futures, stand at the lowest level since Feb. 24, 2012, according to James Williams, energy economist at WTRG Economics. That should erode more of the discount of West Texas Intermediate crude to Brent crude, he said. October Brent crude UK:LCOV3 -0.04% rose 35 cents, or 0.3%, to end at $115.26 a barrel on London’s ICE Futures exchange. More influences Syria remained in the forefront of concerns for the oil market, even as traders digested the latest spate of U.S. economic data. That country isn’t a major oil producer, but a wider conflict could lead to supply disruptions in the Middle East. Reuters Oil traders continue to watch developments in Syria. The Senate Foreign Relations Committee approved a resolution Wednesday authorizing the use of force by the Obama administration in Syria. That’s the first of several expected votes in Congress. Yves Lamoureux, president of Lamoureux & Company, a market advisory firm based on behavioral economics, said smart money is looking beyond the EIA’s inventory drop and the conflict in Syria. “It’s not a conflict issue that drives the prices, but a demand issue.” “We don’t think any of the recent geopolitical events will slow down a world-wide growth pickup,” he said. And “faced with increased demand for oil products, I believe that oil producers are starting to buy back some of the hedged production back.” So once the Syrian crisis is over, oil traders will find themselves scratching their heads over oil’s continued climb, said Lamoureux. For now, traders looked to Thursday’s economic data for hints on the outlook for energy demand. Automatic Data Processing Inc. reported that private-sectors jobs increased by 176,000 in August, missing expectations of 185,000. Initial weekly jobless claims came in at 323,000, better than forecasts for 330,000. Thursday’s employment data came ahead of Friday’s much-anticipated monthly jobs figures. The Institute for Supply Management said its poll of service-sector purchasing managers climbed to 58.6% last month from 56.0% in July. That’s the highest level since the index was created in 2008. Factory orders, according to the Commerce Department, fell 2.4% in July to a seasonally adjusted $485 billion. Meanwhile, central banks in Japan, Europe and the U.K. all kept their policies unchanged as expected, although the Bank of Japan raised its view of the economy. Back on Nymex, natural-gas prices took a hit Thursday after the EIA reported a U.S. supply increase of 58 billion cubic feet for the week ended Aug. 30. That was at the high end of expectations; analysts polled by Platts had forecast a climb of between 53 billion cubic feet and 57 billion cubic feet. October natural gas NGV13 -0.31% lost nearly 11 cents, or 2.9%, to $3.575 per million British thermal units, the lowest close for the October contract since Aug. 27. Prices traded slightly higher at $3.69 shortly before the supply data.
Posted on: Fri, 06 Sep 2013 03:24:23 +0000
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