Sunday, February 24, 2008
Crude ends higher on Turkey tensions, US cold weather (8:43 p.m.)
HOUSTON - Crude oil futures settled higher Friday, as tensions between Turkey and Iraq and cold weather in the U.S. Northeast snapped the market out of its one-day slump.
Light, sweet crude for April delivery settled 58 cents, or 0.6 percent, higher at $98.81 a barrel on the New York Mercantile Exchange.
April Brent crude on the ICE futures exchange in London closed 76 cents higher at $97 a barrel.
Crude was mostly higher throughout the day on news that Turkish troops had entered Iraq in their battle with Kurdish separatists. Turkey serves as an oil and gas transportation hub, and Iraq is a major crude supplier to Europe.
Traders looking to push oil higher were struggling against strong headwinds, however. Oil rose in five straight sessions between Feb. 13 and Feb. 20 before settling $1.47 lower on Thursday. U.S. government data released that day showed a larger-than-expected increase in crude inventories, which had many predicting that the
market would head significantly lower over the next few sessions.
But Friday's gains showed that the rally had some life in it yet, and that the April contract could mount another challenge of $100.
"I'm not a believer in $100 oil...but seeing is believing," said Stephen Schork, editor of the energy markets newsletter the Schork Report in Villanova, Pennsylvania.
Components of the inventory data release ignored on Thursday may have played a larger role on Friday, said Peter Beutel, president of Cameron Hanover, an energy risk management firm in New Canaan, Connecticut.
Distillates, which include heating oil and diesel, saw a 4.5-million-barrel draw last week, three times the average analyst forecast. Cold weather across much of the U.S., including a winter storm that hit the Northeast Friday, has caused a late-season surge in heating oil demand.
Heating oil futures contract settled at a record Friday. March heating oil settled 2.49 cents higher, or 0.9 percent, to $2.7630 a gallon. That, combined with extremely low refinery utilization last week, likely sparked supply concerns in the product markets, which helped boost crude, Beutel said.
"The (inventory) report had a couple of bullish factors that I thought got lost in the shuffle," Beutel said. "The market has a lot of technical strength and seasonal strength."
Front-month March reformulated gasoline blendstock, or RBOB, closed higher by 1.17 cents, or 0.7 percent, to $2.5337 a gallon.
In the end, the fact that the market made a run at $100 on Thursday, failed, settled lower and still rebounded underscores the strength of the nearly two-week-old rally, said Mark Waggoner, president of Excel Futures in Huntington Beach, California.
"I didn't think people would want to stay long when crude hit these new highs," he said. "But there's not a lot of impetus to make the market go down, either." (AP) |
