WSJ:OIL FUTURES: Crude Steady in Asia Ahead of Bernanke Speech
By Eric Yep
Crude-oil futures are trading near yesterday's settlement value in Asia Friday as investors await U.S. Federal Reserve Chairman Ben Bernanke's speech later in the trading day.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $94.78 a barrel at 0643 GMT, up $0.16 in the Globex electronic session. October Brent crude on London's ICE Futures exchange rose $0.20 to $112.85 a barrel.
Nymex crude closed 0.9% lower overnight, tracking a weaker euro and a broad decline in equity markets on account of disappointing global economic data and concerns over the euro zone.
Markets are eyeing Bernanke's comments at an annual economic symposium in Jackson Hole, Wyo. Friday morning local time.
"The macro factor appears to be discounting a lack of definition out of the Fed [Friday], and as a result, the stimulus factor could be placed on hold for a few more weeks as much of the financial space seeks guidance from other items," energy consulting firm Ritterbusch and Associates said in a note.
Earlier Friday, data showed Japan's industrial output unexpectedly fell 1.2% in July from a month earlier versus a forecast 1.8% rise, adding to the negative data.
Oil prices are supported by developments in the Middle East. Iran has doubled its capacity to produce higher-enriched uranium at a facility in the north and continues to block international inspectors, according to the International Atomic Energy Agency.
The Middle East is boosting oil prices because if the conflict over Iran's nuclear program escalates, oil exports from the Middle East will become more uncertain, ABN AMRO said in a note.
The bank said it doesn't expect the $15 risk premium to decline in coming months as tensions between Iran and Israel are increasing and could rise further if Israel takes action.
The global economy won't pick up speed overnight, but better-than-expected economic data and further monetary stimulus could improve sentiment, which may increase demand expectations, ABN AMRO said.
"We expect oil prices to trade within relatively tight ranges as the impact of the modest economic recovery will be countered by a decline in risk premium as soon as the Middle East tensions start to ease in 2013," the bank said.
Nymex reformulated gasoline blendstock for September--the benchmark gasoline contract--fell 71 points to $3.0755 a gallon, while October heating oil traded at $3.1347, up 14 points.
ICE gasoil for September changed hands at $984.25 a metric ton, unchanged from Thursday's settlement.
