MW: Oil, gasoline at highest in more than 30 months
Gains extend on uncertainty tied to possible government shutdown
By Claudia Assis , MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures advanced 2.3% Friday, settling at their highest in more than 30 months as the dollar sank and investors worried about deadly Middle East protests and an oilfield fire in Libya.
Even more eye-popping were gains in Brent crude futures, which rallied 4% and settled past $126 a barrel. Gasoline futures traded at their highest since July 2008.
The dollar was sharply weaker as political wrangling in Congress gave no signs of resolving a budget impasse, and a U.S. government shutdown loomed.
Friday’s moves for oil and other commodities was mostly about the weaker dollar, said Kyle Cooper, managing director of IAF Advisors in Houston.
“There’s still a lot of money that wants to come to commodities in general” and plenty of people who judge that current oil prices still would not “significantly impact” demand, he said.
Cooper said he believes the higher prices have already dented oil demand, but has no desire to stand in the way of the market.
“Even I, I don’t want to sell this. There’s too much momentum,” he said. “It’s very difficult to be short.”
Investors were also bullish on oil on fading hopes for a quick resolution of the Libyan conflict, which was mired in a stalemate, and additional unrest in Syria and Yemen.
Light crude for May delivery (CLK11 113.05, +2.49, +2.25%) rose $2.49, or 2.3%, to settle at $112.79 a barrel on the New York Mercantile Exchange, the best settlement for oil since September 2008. Crude rose 4.5% this week.
May Brent crude (ZZ:BU11K 126.90, 0.00, 0.00%) , Europe’s benchmark, gained $3.98, or 3.2%, to $126.65 a barrel on ICE Futures in London. That was Brent’s highest settlement since late July 2008.
Oil prices gathered steam as President Barack Obama’s deadline on a budget resolution came and went without an agreement on a funding plan for the federal government’s current fiscal year.
Both houses of Congress remained in session Friday afternoon, hours before a partial shutdown would begin.
Meanwhile, a fire at an oilfield in Libya added to concerns about supplies. Col. Moammar Gadhafi’s government blamed the fire at the Sarirl field on a NATO airstrike. NATO denied it had launched attacks in the area and blamed forces loyal to Gadhafi for the fire.
After the fire, the trickle of Libyan oil that could be exported ran dry. Most of Libya’s crude oil was exported to Europe.
In Syria, at least 10 people were reported dead after security forces in the southern city of Deera opened fire to disperse protesters. Protests also rocked other towns. The Syrian government blamed the violence on masked gunmen, who they said fired at the police and at protesters.
