WSJ:Oil Futures Choppy in Asia; Eyes on Fiscal Cliff Talks
By Eric Yep
Crude-oil futures are choppy in Asian trade Thursday but retain the previous days gains, supported by expectations that the U.S. budget talks will resume this week and by ongoing Middle East turmoil.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in February traded at $91.13 a barrel at 0700 GMT, up $0.15 in the Globex electronic session. February Brent crude on London's ICE Futures exchange rose $0.01 to $111.08 a barrel.
Investors remain focused on the U.S. budget talks as President Barack Obama is expected to arrive back in Washington and Congress is scheduled to resume work later Thursday.
On Wednesday, Democrats and Republicans are deadlocked over how to avert tax increases and spending cuts starting next week.
"Needless to say, any delays beyond 2012 in settling the fiscal situation may tip the U.S. into a recession, thus effectively depressing oil prices then," Singapore-based OCBC Bank said.
OCBC however said its outlook for a "sunnier" 2013 forecasts higher oil demand in the coming year. It expects Nymex crude to average $95/bbl and Brent $110/bbl in 2013.
"Going forward into 2013, we opine that geopolitical tensions, especially in the Middle East, are pivotal for oil prices," OBCB added.
Libyan protesters have forced a major oil terminal in the country's east to halt operations for four days, the AFP said in a report citing the deputy oil minister.
Oil prices are also supported by shrinking U.S. oil stocks.
U.S. oil-inventory data are expected to show crude-oil inventories fell last week, by 1.7 million barrels, according to a Dow Jones Newswires survey of analysts.
The American Petroleum Institute, an industry group, is scheduled to release its oil data survey at 4:30 p.m. EST Thursday. The closely watched government survey from the Energy Information Administration is due at 11 a.m. EST Friday.
In Asia, stock markets were boosted by comments from newly appointed Japanese prime minister Shinzo Abe to introduce stronger easing measures to revive the economy and help exporters regain competitiveness.
Nymex reformulated gasoline blendstock for January--the benchmark gasoline contract--rose 117 points to $2.8275 a gallon, while January heating oil traded at $3.0596, 83 points higher.
ICE gasoil for January changed hands at $941.75 a metric ton, up $0.50 from Wednesday's settlement.
