NP: Crude oil climbs on Middle East tensions, economy hopes
Renewed violence in Syria, tensions with Iran and improved global investor sentiment after Federal Reserve Chairman Ben Bernanke downplayed the risk of a double-dip recession have affected oil prices which continued their climb on 19 July. By early afternoon in Europe, benchmark crude was up $1.18 at $91.05 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 65 cents to settle at $89.87 per barrel in New York on 18 July. In London, Brent crude was up 76 cents at $105.92 a barrel on the ICE Futures exchange.
Chris Weafer, Chief Strategist at Troika Dialogue in Moscow, wrote in an e-mailed note to investors on 19 July that the latest boost to the price of Brent (and Urals) is coming from the weekly US Energy Department oil inventory report. That showed gasoline stocks down 1.8mn barrels last week versus an expected gain of 1.2mn. But that is actually explained with a fall in refinery utilisation and a rise in crude stocks, he wrote earlier in the day. “Still, traders latched onto the headline and added almost $1.5 p/bbl yesterday [18 July]. Without an escalation in the standoff with Iran or some other solid risk factor materialising the more likely trend in Brent in the coming week or two is a reversal back below $100 p/bbl,” Weafer wrote.
