By Claudia Assis, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures overcame a weak start on Tuesday to rally more than 1% as traders keyed on developments in the Middle East amid fighting in Libya and more protests in Yemen and Syria.
Crude for April delivery (CLJ11 103.53, +1.20, +1.17%) , the front-month contract expiring Tuesday, added $1.29, or 1.3%, to $103.62 a barrel on the New York Mercantile Exchange. It had earlier traded modestly lower.
Conflict in Libya continued to dominate the headlines, with unrest in Yemen and Syria also vying for investors’ attention and adding to concerns more strife could hit the Middle East and North Africa region, home to key oil exporters.
“The market remains wary of events in Libya and the broader region, but seems to have arrived at the point where the sound of gunfire no longer prompts immediate buying,” Tim Evans, an oil analyst with Citigroup, said in a note to clients Tuesday. Volumes were low, he added.
Closer to home, investors will get the first glimpse at U.S inventories as a trade group is scheduled to report its weekly data a day ahead of official word from the Department of Energy.
In Yemen, a group of generals and other top leaders announced they endorsed antigovernment protesters, weakening Yemen’s embattled president further.
According to news reports, President Ali Saleh indicated he’d accept to step down earlier, by the end of the year, in an attempt to stave off the rebellion.
More protests took place in Syria on Tuesday following the deaths of at least four protesters on Friday.
The fight to establish a no-fly zone and protect civilians in Libya had a setback Tuesday. A U.S. military jet crashed overnight, an apparent malfunction, and some disputes about leadership of the coalition arose.
Most experts expect Libya’s oil production to be slow to recover from the fighting, if not outright stop, as the situation there deteriorates. Read more about Libya's oil output
Meanwhile, energy products got a lift from higher crude prices, with gasoline for April delivery (RBJ11 3.00, +0.00, +0.11%) turning positive and up less than a penny, or 0.3%, to $3 a gallon.
Natural gas for April delivery (NGJ11 4.20, +0.04, +0.84%) gained 3 cents, or 0.8%, to $4.19 per million British thermal units.
The American Petroleum Institute is scheduled to report its weekly inventories data 4:30 p.m. Eastern on Tuesday. The DOE’s Energy Information Administration reports its official data Wednesday at 10:30 a.m. Eastern.
Analysts polled by Platts expect crude-oil inventories to have risen 2 million barrels for the week ended March 18.
Gasoline inventories were seen down 2 million barrels, while supplies of distillates, which include heating oil and diesel, are seen down 1.5 million barrels
