US crude futures rose today, boosted by reports that Turkey had sent troops into Iraq and by a cyclone buffeting Opec-member Oman.
The higher oil prices camedespite a fall in RBOB gasoline futures after the US government said gasoline stocks rose more than expected last week.
"Crude was up on the Turkey issue and the lingering effects of the cyclone," said John Kilduff, senior vice president, Man Financial.
On the New York Mercantile Exchange (Nymex), July crude rose 35 cents, or 0.53%, to settle at $65.96 per barrel, trading from $65.21 to $66.31.
Today's peak was just under Monday's $66.48 high, which was the highest level for front-month crude since $66.65 was struck on April 30.
In London, July Brent crude rose 57 cents to settle at $71.02 a barrel, trading from $70.09 to $71.40.
While Turkey denied a report today that it had launched a major incursion into northern Iraq to crush Kurdish rebels, a military source said troops had conducted a limited raid across the border.
Jabar Yawir, deputy minister for Peshmerga Affairs in Kurdistan, told Reuters 10 Turkish helicopters with about 150 Turkish special forces landed in a village in Mazouri, 2 miles (3 kilometres) inside the Iraqi border. He said the Turkish troops left after two hours.
Iraqi Foreign Minister Hoshiyar Zebari said today there was no evidence that Turkish troops had crossed the Iraqi border to launch a military operation.
Cyclone Gonu pounded Oman today, halting oil and gas exports for a second day.
Oman's only outlet for 650,000 barrels per day of crude exports, Mina al-Fahal, was shut a second day as was the Sur terminal, which handles 10 million tonnes per year of liquefied natural gas.
The United Arab Emirates' port of Fujairah, in the Gulf of Oman, has been cleared of anchored vessels and is closed to all ships until further notice, the state news agency said.
A senior Iranian oil official said the cyclone was not expected to disrupt supplies.
In New York, products futures were mixed today as crude reacted to geopolitical and weather factors.
Nymex July RBOB fell 1.69 cents, or 0.77%, to settle at $2.1904 per gallon, trading from $2.1615 to $2.2230. The low was the weakest for front-month RBOB since it hit $2.1566 on 8 May.
Nymex July heating oil rose 0.93 cent, or 0.47%, to settle at $1.9737 a gallon, trading $1.95 to $1.9847. Yesterday's $1.9850 peak was the highest since $2.015 was struck on 1 September.
Domestic gasoline supply rose 3.5 million barrels to 201.5 million barrels in the week to 1 June, according to the US Energy Information Administration's (EIA's) weekly report today. It was a fifth consecutive build in gasoline stocks.
A Reuters poll of analysts had yielded a forecast for supplies to be up, but only by 1.4 million barrels.
Distillate supply rose 1.9 million barrels to 122.3 million barrels. The forecast was for only an 800,000-barrel build.
Crude stocks rose 100,000 barrels to 342.3 million barrels, against a forecast of a 300,000-barrel rise.
Refinery use fell 1.5 percentage points to 89.6% of capacity, against a forecast for a 0.6 percentage point rise. The EIA said that was the lowest level for capacity utilisation in early June since 1992.
EIA analyst Doug MacIntyre said strong imports of finished gasoline and gasoline blendstocks, as well as growing production of domestic ethanol, could keep a cap on the bullish effect on oil prices of low refinery use.
"It looks like gasoline imports made up the difference, leading to the larger-than-expected build," said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc. "The data is a very mixed bag. The build in gasoline is weighing, but refinery runs are at such low levels. It looks bullish overall."
© Upstream 2007
