By Myra P. Saefong and Kristene Quan, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures climbed Wednesday, bouncing back after a recent decline, as Israel and Hamas had yet to reach a cease-fire and trade group data showed an unexpected slide in crude supplies.
Crude oil for January delivery CLF3 +0.89% rose 73 cents, or 0.8%, to $87.48 a barrel on the New York Mercantile Exchange.
The gains followed Tuesday’s nearly 3% drop in the January contract as hopes for a Gaza Strip cease-fire relieved some of the concerns over supply risks in the Middle East. See: Oil rallies, ends above $86 to score weekly gain.
“The petroleum markets were giving thanks for Secretary of State Hillary Clinton’s trip to the Middle East, and the perhaps premature report of a cease-fire deal,” prompting prices to fall sharply on Tuesday, said Phil Flynn, senior market analyst at the Price Futures Group. “Yet, as the day wore on, it became less clear that a deal had been reached.”
After Tuesday’s Nymex settlement, the American Petroleum Institute reported a surprise decrease for oil inventories, saying that crude supplies fell 1.9 million barrels for the week ended Nov. 16. See: Oil, gasoline, distillate supplies drop: API
The more closely watched U.S. Energy Information Administration report was due out at 10:30 a.m. Eastern, with analysts polled by Platts expecting a 1 million-barrel increase in crude-oil stocks.
But GFT technical analyst Fawad Razaqzada said the fighting in Gaza remained a key focus: “If the situation escalates, then that will be reflected in even higher oil prices.”
He said resistance for the Nymex crude-oil contract comes in the range between $89 and $90. “A close above [this] range would be bullish for oil,” he said.
U.S. initial jobless claims dropped by 41,000 to a seasonally adjusted 410,000 in the week ended Nov. 17, the Labor Department reported Wednesday. Economists polled by MarketWatch expected a fall to 418,000, so the bigger-than-expected decline was a bit supportive for oil prices.
Among other energy futures Wednesday, heating oil for December delivery HOZ2 +1.33% rose 3 cents, or 1.1%, to $3.07 a gallon, and December gasoline RBZ2 +1.30% also climbed 3 cents, or 1.2% to $2.75 a gallon.
Natural-gas futures for December delivery NGZ12 +0.05% fell a penny, or 0.2%, to $3.82 per million British thermal units.
The EIA will release its weekly natural-gas supply report at noon Eastern, a day earlier than usual due to Thursday’s Thanksgiving holiday. Analysts surveyed by Platts expect to see a withdrawal of between 23 billion cubic feet and 27 billion in last week’s inventories.
Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.
Kristene Quan is a MarketWatch reporter, based in Hong Kong.
