Worries surround Keystone pipeline; dollar strength curbs oil gains
By Sara Sjolin and Kristene Quan, MarketWatch
LONDON (MarketWatch) — Crude-oil futures moved higher on Friday, as disruptions to a North American pipeline gave rise to supply concerns.
Oil for November delivery CLX2 +0.87% rose 80 cents, or 0.9%, to trade at $92.92 a barrel in electronic trading on Globex.
Oil futures had lost ground on Thursday after a clutch of economic reports weighed on investor confidence and propelled the dollar higher.
On Friday, a stronger dollar also helped to curb gains. Commodities priced in dollars, such as oil, tend to weaken when the dollar gains, as they become more expensive for holders of other currencies.
The ICE dollar index DXY +0.10% , which measures the greenback against a basket of six major global currencies, climbed to 79.435, up from 79.356 in late North American trading Thursday.
However, oil prices found some support as a result of worries about supplies to the U.S. in coming days. The Keystone pipeline, a major source of crude to refineries in the Midwest and the Gulf Coast, was shut Thursday for three days after TransCanada Corp. TRP -1.42% CA:TRP -0.67% said it found a “small anomaly” during routine tests. See: TransCanada shuts Keystone oil pipeline
Traders juxtaposed this against concerns about supplies in the Middle East, with the European Union’s imposition of new sanctions on Iranian oil and gas companies serving as the latest escalation tied to Tehran’s nuclear ambitions.
“Bullish factors such as supply risks and the plentiful supply of liquidity by the central banks are currently counterbalanced by bearish factors such as the supply surplus and subdued demand prospects,” analysts at Commerzbank said in a note. “We assume that the uncertainty will continue for some time yet, but anticipate that the bullish factors will ultimately gain the upper hand as a result of the ultra-expansionary monetary policy pursued by the central banks,” they said.
Also Friday, heating oil for November delivery HOX2 +1.19% rose 3 cents to $3.22 a gallon as November gasoline RBX2 +1.17% rose 3 cents to $2.78 a gallon.
Natural-gas futures for November delivery NGX12 +0.56% added 5 cents to $3.63 per million British thermal units.
Sara Sjolin is a MarketWatch reporter, based in London.
Kristene Quan is a MarketWatch reporter, based in Hong Kong.
