MW:Oil futures rise on weak dollar, Syria tensions
By V. Phani Kumar and Sara Sjolin, MarketWatch
LONDON (MarketWatch) — U.S. crude-oil futures rose modestly Monday, as Middle East tensions gave rise to supply fears and as the dollar edged lower.
Crude for November delivery CLX2 +0.12% added 18 cents, or 0.2%, to $92.01 a barrel during European trading hours.
On Friday, the contract had dropped 21 cents during the New York Mercantile Exchange session, after the International Energy Agency cut its 2012 estimate of growth in oil demand, but still managed to finish the week 2.2% higher.
The downbeat outlook on oil demand also kept gains in check on Monday.
The outlook “makes it quite clear once again that the oil price has recently been pushed up not by fundamentals but by supply risks and the ultra-loose monetary policy pursued by central banks,” analysts at Commerzbank said in a note.
China’s oil consumption was also in focus, after data over the weekend reportedly showed that crude imports in September rose 9.1%, recovering from a 22-month low in August.
“Thus crude imports still remain well below the level seen in the first half of the year, when between 5.3 and 6 million barrels per day were imported,” the Commerzbank analysts said.
Despite the lackluster demand forecasts, analysts said oil markets were likely to remain well supplied going into 2013.
“There is always the risk of a geopolitical event that could disrupt supply to a degree that tips the market into a deficit, but absent such a development, the base case scenario here [for crude-oil] is bearish,” said Timothy Evans, energy analyst at Citi Futures.
Geopolitical events were fresh on investors’ minds on Monday as tensions between Syria and Turkey escalated over the weekend, with Turkey banning all Syrian aircraft from its air space.
A softer dollar also helped support oil prices. The ICE dollar index DXY -0.03% , which measures the greenback’s performance against a basket of six major global currencies, fell to 79.649, down from 79.677 in late North American trade Friday.
Global equity markets traded mixed to begin the week, with most Asian stock markets declining after data out of China showed an increase in consumer prices that was in line with expectations, although wholesale prices dropped more than estimated. Read Asia Markets. and More about China inflation data.
European stocks traded higher, however, while U.S. stock futures pointed to a bullish open on Wall Street. Read: Europe stocks rise after Chinese data and See: Stock futures up ahead of retail sales, Citigroup
Among other energy products, November heating-oil prices HOX2 +0.13% added 0.1% to $3.23 a gallon and natural-gas futures NGX12 -1.25% for delivery in the same month shed 1.3% to $3.56 per million British thermal units.
November futures for gasoline RBX2 -0.71% were off 0.6% at $2.88 a gallon.
Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
Sara Sjolin is a MarketWatch reporter, based in London.
