Narrow gains for petroleum products and natural gas
By Myra P. Saefong and V. Phani Kumar, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures turned higher Tuesday, reclaiming the $85-a-barrel level as the U.S. dollar gave back earlier gains to trade flat and as traders awaited a vote in Slovakia on the euro-zone bailout fund.
Light, sweet crude oil for November delivery CL1X +0.74% added 79 cents, or 0.9%, to $86.20 a barrel on the New York Mercantile Exchange. It had traded as low as $83.97 earlier.
Prices have climbed over the past four sessions in a row — including a rally of nearly 3% on Monday, when crude closed at a level not seen since late September.
Brent crude for December delivery UK:BRN1Z +1.01% saw similar Tuesday gains, up $1.40 at $108.05 a barrel on London’s ICE Futures exchange.
“Supply jitters” brought buying into the Brent market, said Bob van der Valk, a petroleum-industry analyst based in Terry, Mont.
Striking customs officers disrupted oil shipments from Kuwait on Monday, according to a New York Times report.
Oil traders appeared cautious, however, as they awaited the latest developments related to the euro-zone debt crisis.
Slovakia, the poorest of the 17 members of the euro zone, appeared likely to fall short of the votes needed to approve increased powers for the bailout fund, with the vote exposing strains within the nation’s ruling four-party coalition. Read full story on the Slovak vote.
Meanwhile, the dollar index DXY +0.05% , which measures the U.S. unit against a basket of six currencies, stood at 77.589, little changed from 77.581 Monday. Strength in the greenback tends to pressure prices and weakness in the currency tends to support prices for commodities, which are traded in dollars. Read more on currencies action.
For now in oil, “volatility remains the market’s consistent factor and that will continue,” said Michael Fitzpatrick, editor in chief of the Kilduff Report. A rejection by the Slovak parliament “may result in a selloff reminiscent of last week’s action.”
The oil market showed little reaction to the Organization of the Petroleum Exporting Countries further trimming its 2011-2012 growth forecast for global oil demand.
In a monthly report, OPEC cut the global demand growth forecast for this year by 180,000 barrels of oil a day. The cartel also warned it could cut the outlook again. Read more about the OPEC forecast cut.
Other energy futures traded mostly higher Tuesday.
November heating oil HO1X -0.12% tracked oil’s turn higher, adding 0.8 cent to $2.91 a gallon, while November gasoline RB1X +1.67% added 5 cents to $2.75 a gallon and November natural gas NG11X +1.30% traded at $3.55 per million British thermal units, up 1 cent.
Weekly petroleum supply reports from the American Petroleum Institute and the Energy Information Administration will each be released a day late due to Columbus Day holiday observed on Monday.
The API will release its data at 4:30 p.m. Eastern on Wednesday and the EIA’s report will be released at 11 a.m. Eastern on Thursday.
Prestige Economics expects the data to show a decline of 2.5 million barrels in crude-oil inventories for the week ended Oct. 7, along with supply decline of 500,000 barrels for both gasoline and distillates.
Myra Saefong is a MarketWatch reporter based in San Francisco.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau. Sarah Turner in Sydney contributed to this report.
