Oct 12 2012
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OIL FUTURES: Prices Up Slightly as Market Looks for Direction
Friday, Oct 12, 2012
By Ben Lefebvre
U.S. crude prices climbed only slightly Friday morning as fears of a possible supply interruption in the Middle East weighed against concerns about a sluggish economic recovery.
Light, sweet crude for November delivery was up 0.3% at $92.36 a barrel on the New York Mercantile Exchange after briefly trading in negative territory. Brent crude on ICE Futures Europe was down 0.7% at $113.87 a barrel.
Traders were still seeking clear signs about the direction of the global economy. Although U.S. economic data seem to be improving with a larger-than-expected drop in jobless claims reported Thursday, there was still concern about slowdowns in China and particularly Europe, where Standard & Poor's cut Spain's credit rating to BBB-, its lowest investment grade.
"Right now we're just getting batted around by headlines," said Gene McGillian, a broker at Tradition Energy. "We've got support from signs that U.S. economy is recovering, but the market is looking for signs whether a European stimulus will take hold."
The IEA forecast in its medium-term report that global oil production capacity would grow to 102 million barrels a day by 2017, outstripping its demand forecast of 95.7 million barrels a day. Demand in developed countries would continue to contract, and the need for oil in developing countries would grow more slowly than previously forecast, the IEA said.
"The IEA had an effect, pulled us back early on," said Carl Larry, president of Oil Outlooks and Opinions.
Even with those economic concerns, fears that the fighting between Turkey and Syria could cause a disruption in Middle East oil supply will keep prices from falling too much, traders said. Traders are cautious about leaving for the weekend without enough contracts for oil in hand in case tensions between Turkey and Syria cause a supply problem Monday, said Peter Donovan, vice president at Vantage Trading.
"On a Friday with escalating tensions in the Middle East, it will be hard for guys to knock it down too hard," Mr. Donovan said.
Write to Ben Lefebvre at firstname.lastname@example.org
(END) Dow Jones Newswires
October 12, 2012 09:31 ET (13:31 GMT)
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