MW:Supply concerns, weak dollar lift crude-oil prices
By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Oil futures moved higher during European trading hours on Monday, as investors worried about supply constraints and continued tensions in the Middle East.
Crude-oil futures for November delivery CLX2 +0.59% added 62 cents, or 0.7%, to $90.67 a barrel, recouping from a $2.05 loss on Friday.
On Monday, supply concerns were back on the table following the temporary closure of a key pipeline in North America last week. The Keystone pipeline, which sends about 500,000 barrels per day from Canada to the Midwest, was shut last Thursday, but was reportedly due to restart Monday, a day later than expected.
Escalating tensions in the Middle East were also in focus. Lebanon’s intelligence chief, Brig. Gen. Wissam al-Hassan, was assassinated in a car bombing on Friday, and media reports said he was allied with the anti-Syria opposition, raising raised fears of a political crisis in Lebanon.
“The uncertain situation in the Middle East ... remains a factor with the tendency to drive prices upward. Lebanon has now become a new seat of unrest, with violent disputes having taken place there yesterday,” analysts at Commerzbank said in a note.
“The biggest risk factor for the oil price is further deterioration of general market sentiment and accompanied growth in risk aversion,” they added.
A weaker dollar further lent support to oil prices. The DXY -0.09% dollar index, which measures the greenback against a basket of six rival currencies, fell to 79.557 from 79.629 in North American trade late Friday.
Dollar-denominated currencies tend to rise on a softer dollar, as they get cheaper for holders of other currencies.
Elsewhere in the energy complex, prices were mixed. Heating oil for December delivery HOZ2 +0.32% added 0.3% to $3.13 a gallon, while November gasoline RBX2 +0.49% rose 0.5% to $2.71 a gallon.
Natural gas for November delivery NGX12 -0.44% slipped 0.2% to $3.61 per British thermal unit.
Sara Sjolin is a MarketWatch reporter, based in London.