BS: Oil Heads for Weekly Gain on Middle East Tension
Oil headed for its first weekly gain in a month as increasing Middle East tension prompted concern that supplies may be disrupted, and as euro-region industrial production increased.
Prices gained as much as 0.6 percent as European Union nations reached a preliminary decision to tighten sanctions on Syria, two EU officials said. The euro strengthened against the dollar for a second day after the EU’s statistics office in Luxembourg said industrial output in the currency bloc unexpectedly increased 0.6 percent.
“The market has a little bit of an upward bias as we still have some support from geopolitical risk,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “We are seeing some improvement in economic activities.”
Crude for November delivery rose 8 cents to $92.15 a barrel at 9:18 a.m. on the New York Mercantile Exchange. Prices are up 2.5 percent this week and down 6.8 percent this year.
Brent for November settlement fell 89 cents, or 0.8 percent, to $114.82 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude’s premium to New York oil narrowed from the biggest gap since October 2011.
The EU will tighten sanctions on Syria by banning the 27- country bloc’s companies from providing services to exporters of arms from Syria, according to the officials, who declined to be identified because the talks are private.
European foreign ministers are scheduled to formally approve the measures at a meeting Oct. 15 in Luxembourg, the people said.
Syrian Plane
A Syrian Arab Airlines plane forced to land on Oct. 10 by Turkish F-16 jets contained equipment and munitions sent for the Syrian Defense Ministry from a Russian institution equivalent to a state arms manufacturer, Recep Tayyip Erdogan, Turkey’s prime minister, said yesterday.
The growth in the euro region’s industrial production, led by rising output by countries including Italy and France, beat the median estimate of a drop of 0.4 percent by economists polled by Bloomberg. Output slipped 2.9 percent from a year earlier after a 2.8 percent decline in July.
The euro gained as much as 0.5 percent to $1.2992. A stronger euro and weaker dollar increase oil’s appeal as an investment alternative.
To contact the reporters on this story: Moming Zhou in New York at mzhou29@bloomberg.net
To contact the editor responsible for this story: Dan Stets in New York at dstets@bloomberg.net.
