Aug 24 2012
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OIL FUTURES: Crude Posts Slim Gains as Market Tracks Storm
Friday, Aug 24, 2012
--U.S. durable goods orders stronger than expected
--Tropical Storm Isaac could be hurricane in Gulf by early Tuesday
--Pre-storm precautionary buying erases earlier losses
By David Bird
The protective buying lifted prices from earlier slim losses that were spurred by strength in the dollar, which discourages investors using other currencies to stake out positions in dollar-based commodities, like crude oil futures.
But traders said concerns about forecasts for Tropical Storm Isaac to strengthen into a hurricane in the U.S. Gulf by Tuesday brought buyers off the sidelines. The potential for at least a temporary disruption of Gulf output comes as tightening oil inventories in the world's biggest oil consumer have pushed prices to their highest level since early May in recent days. Heightened tensions in the Middle East and increased rhetoric between Israel and Iran also argues against betting against a steep price fall in the near term, traders said.
"There's a lot of underlying anxiety about Iran," said Andy Lebow, senior vice president of energy futures at Jeffries Bache, noting a New York Times report that international nuclear inspectors will report soon that Iran may be speeding up production of nuclear fuel. Stricter sanctions on Iran, including a European Union ban on oil imports, has kept a premium in oil prices in recent months, analysts said, despite moves by other producers to cover lost volumes.
October-delivery crude oil futures on the New York Mercantile Exchange were trading 23 cents higher, at $96.50 a barrel. ICE October Brent crude oil futures were 29 cents lower, at $114.73 a barrel.
In its 8 a.m. EDT advisory, the National Hurricane Center said Tropical Storm Isaac's winds had picked up to 50 miles per hour as it moved westward through the Caribbean and was expected to turn to the northwest Friday evening. In its forecast tracking model, the NHC shows Isaac moving over the island of Hispaniola later Friday and over southeastern Cuba on Saturday.
By early late Sunday or early Monday, the tropical storm is expected to make its approach to Florida, possibly passing along the state's western coastline during the day before strengthening to hurricane status in the Gulf by early Tuesday, the NHC said.
A landfall is expected around 2 a.m. EDT Wednesday anywhere from the central Louisiana coastline to Florida--with the Florida panhandle and Alabama coast border area at the mid-point of the NHC track.
Reformulated gasoline blendstock futures were trading higher for a fifth day Friday, after rising 2.9%, or 8.8 cents, so far this week and settling Thursday at the highest price since April 30. September RBOB was 0.31 cent higher, at $3.1189 a gallon.
Heating oil for September was up 0.14 cent at $3.1344 a gallon. Prices gained four cents this week, settling Thursday at the highest level since May 2.
Write to David Bird at firstname.lastname@example.org
(END) Dow Jones Newswires
August 24, 2012 10:06 ET (14:06 GMT)
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