Printer Friendly

Brent oil up at 2-1/2 yr peaks above $104.

London crude prices extended gains to hold at 2-1/2 year highs of more than $104 a barrel on Thursday, as fresh Israel-Iran tension fed spreading unrest in the Middle East and stoked fears of a disruption of oil flows in the region.

U.S. oil gave up its morning gains to fall below $85 a barrel, after industry data showed crude inventories rose last week, although the increase was lower than expected.

A raft of U.S. economic reports, due later in the day, will provide more trading cues. The data scheduled for release include weekly jobless claims, January consumer price index and the Conference Board's leading economic indicators.

"Brent is still on an uptrend, and depending on the economic data that comes out of the United States tonight, it could easily hit $105 later in the day," said Ken Hasegawa, a commodity derivatives manager at Japan's Newedge brokerage.

"WTI continues to look bearish from both a fundamental and technical point of view, so the spread could widen further -- it's possible for it to cross $20 over the next few weeks."

Brent crude for April delivery rose 27 cents to $104.05 a barrel by 0730 GMT, after settling $2.14 higher at $103.78, its highest close since September 2008, and off an earlier high of $104.52.

U.S. crude for March delivery eased 3 cents to $84.96 a barrel, after settling up 67 cents at $84.99, snapping three straight days of losses.

The spread between the two grades held above $16, after hitting a fresh record of $16.31 a barrel in the previous session.

Fresh tensions between Israel and Iran continued to rattle markets already spooked by spreading anti-government protests in the Middle East, raising the spectre of a supply disruption in this key oil-producing region.

Two Iranian warships planned to sail through the Suez Canal en route to Syria on Wednesday, Israel's foreign minister said, calling it a "provocation", but the vessels were seen as posing no serious military threat.

Clashes were reported in tightly controlled oil producer Libya, sandwiched between Egypt and Tunisia, while new protests erupted in Bahrain, Yemen, Iran and Iraq on Wednesday.

Also helping widen the Brent-WTI premium was the latest rise in inventory levels at the Cushing, Oklahoma, delivery point for the New York Mercantile Exchange oil futures contract.

Crude stored at the hub rose 250,000 barrels last week to 37.7 million barrels, just below the 38.3 million barrel record level hit in the week to Jan. 28, the Energy Information Administration's weekly data showed.

In total, U.S. crude stocks rose 860,000 barrels to 345.9 million barrels, its fifth straight weekly gain, but the increase was less than the forecast 2.2 million-barrel rise.

U.S. economic indicators due later are expected to show an uneven recovery in the world's top energy consumer.

The Labor Department will unveil first-time claims for jobless benefits for the week ended Feb. 12 at 1330 GMT. Economists forecast a total of 400,000 new filings against 383,000 in the prior week.

January consumer price data will also be released at 1330 GMT. Economists expect a 0.3 percent increase compared with a 0.4 percent rise in December.

The Conference Board will release its report on January's leading economic indicators at 1500 GMT. Economists forecast a 0.2 percent rise compared with a 1.0 percent increase in the prior month.

Asian stock markets rose on Thursday, buoyed by strong corporate earnings and as the Federal Reserve expressed cautious optimism about the strength of the U.S. economic recovery amidst lingering concerns over high unemployment levels.

The dollar hit a one-week low against a basket of currencies on Thursday, hurt by worries over rising tensions in the Middle East and as subdued U.S. economic data helped keep U.S. bond yields in check.

The dollar index , which tracks the greenback's performance against a basket of major currencies, was nearly unchanged at 78.197.

Copyright Financial Mirror. All right reserved.

Provided by Syndigate.info an Albawaba.com company
COPYRIGHT 2011 Al Bawaba (Middle East) Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2011 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Financial Mirror (Cyprus)
Geographic Code:7ISRA
Date:Feb 17, 2011
Words:684
Previous Article:Apple is working on a new smaller and cheaper iPhone.
Next Article:London art auctions show rise on 2010 totals.

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters