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UPDATE 6-Brent oil gains on Syria, Iran tension
Wed, 18th Jul 2012 14:59
By Simon Falush
LONDON, July 18 (Reuters) - Brent crude oil gained on Wednesday, up for a
Brent crude was up 40 cents to $104.40 a barrel by 1340 GMT, after settling 63 cents higher on Tuesday. U.S. oil rose 18 cents to $89.40 a barrel after ending up 79 cents.
It was heading for its highest close since May 29.
Syria's defence minister and President Bashar al-Assad's brother-in-law were killed in a Damascus suicide bomb attack carried out by a bodyguard on Wednesday, the most serious blow to Assad's high command in the country's 16-month-old rebellion.
The United States will hold Tehran directly responsible for any attempt to disrupt shipping in the Gulf region and will be able to defeat any Iranian attempt to shut down seaborne commerce, Defense Secretary Leon Panetta said on Wednesday.
Oil has gained more than 17 percent since the low it touched last month, largely because of resurfacing worries about potential conflict between Iran and some Western nations.
'The Iran issue is more at the front of minds,' said Andy Sommer, analyst at EGL in Dietikon, Switzerland.
'It was almost ignored in Q2 but it is now an issue that has caused a loss of capacity, and it has combined with seasonal increase in demand to push up prices.'
Iran said it would insure any foreign ships that enter its waters, in an effort to skirt a European Union ban on insuring ships carrying Iranian crude that has hampered the country's oil exports.
The EU enacted a ban on July 1 on insurance for tankers carrying Iranian oil, preventing EU insurers and reinsurers from covering tankers carrying Iran's crude anywhere in the world.
'The geopolitical risk premium is coming back. There is quite a large concentration of U.S. warships in the (Middle East) Gulf. There's a heightened risk in the area,' Morrison said.
Keeping investors anxious about prospects for the economy, Federal Reserve Chairman Ben Bernanke in his testimony to the Senate Banking Committee said the Fed stood ready to offer more stimulus as needed but stopped short of signalling action in the near term.
He also said recovery was being held back by anxiety over Europe's debt crisis and expressed unease over a stagnant jobs market.
U.S. INVENTORIES
Investors were awaiting data on crude stockpiles in the United States due later in the day from the Energy Information Administration (EIA) to confirm an industry report that said inventories fell more than expected.
Crude inventories fell by 2 million barrels in the week to July 13, gasoline stocks fell by 116,000 barrels and distillate stocks rose by a sharp 3.4 million barrels, data from the American Petroleum Institute showed.
A Reuters poll of 10 analysts forecast a 1.2 million barrel drop in domestic crude inventories. Gasoline inventories were forecast up 1.2 million barrels, on average, while distillate stocks were projected to rise 1.5 million barrels.
'Seasonality appears to be a positive influence with draw-downs on high U.S. crude oil stocks, to fuel the peak of the U.S. driving season, encouraging buying,' analysts at ANZ said in a note.
Brent will retrace into a range of $101.24-$102.07 per barrel, as suggested by its wave pattern and the RSI indicator, while U.S. oil faces resistance at $89.50 per barrel and may revisit its Tuesday low of $87.41, according to Reuters technical analyst Wang Tao.
(Additional reporting by Manash Goswami and Minh Tran; editing by James Jukwey) Keywords: MARKETS OIL/
(simon.falush@reuters.com)(+44 2075427681)(simon.falush.thomsonreuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2012. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LONDON, July 18 (Reuters) - Brent crude oil gained on Wednesday, up for a
sixth session, with bloodshed in Syria highlighting worries about supply from the Middle East and outweighing worries about the state of the global economy.
Brent crude was up 40 cents to $104.40 a barrel by 1340 GMT, after settling 63 cents higher on Tuesday. U.S. oil rose 18 cents to $89.40 a barrel after ending up 79 cents.
It was heading for its highest close since May 29.
Syria's defence minister and President Bashar al-Assad's brother-in-law were killed in a Damascus suicide bomb attack carried out by a bodyguard on Wednesday, the most serious blow to Assad's high command in the country's 16-month-old rebellion.
The United States will hold Tehran directly responsible for any attempt to disrupt shipping in the Gulf region and will be able to defeat any Iranian attempt to shut down seaborne commerce, Defense Secretary Leon Panetta said on Wednesday.
Oil has gained more than 17 percent since the low it touched last month, largely because of resurfacing worries about potential conflict between Iran and some Western nations.
'The Iran issue is more at the front of minds,' said Andy Sommer, analyst at EGL in Dietikon, Switzerland.
'It was almost ignored in Q2 but it is now an issue that has caused a loss of capacity, and it has combined with seasonal increase in demand to push up prices.'
Iran said it would insure any foreign ships that enter its waters, in an effort to skirt a European Union ban on insuring ships carrying Iranian crude that has hampered the country's oil exports.
The EU enacted a ban on July 1 on insurance for tankers carrying Iranian oil, preventing EU insurers and reinsurers from covering tankers carrying Iran's crude anywhere in the world.
'The geopolitical risk premium is coming back. There is quite a large concentration of U.S. warships in the (Middle East) Gulf. There's a heightened risk in the area,' Morrison said.
Keeping investors anxious about prospects for the economy, Federal Reserve Chairman Ben Bernanke in his testimony to the Senate Banking Committee said the Fed stood ready to offer more stimulus as needed but stopped short of signalling action in the near term.
He also said recovery was being held back by anxiety over Europe's debt crisis and expressed unease over a stagnant jobs market.
U.S. INVENTORIES
Investors were awaiting data on crude stockpiles in the United States due later in the day from the Energy Information Administration (EIA) to confirm an industry report that said inventories fell more than expected.
Crude inventories fell by 2 million barrels in the week to July 13, gasoline stocks fell by 116,000 barrels and distillate stocks rose by a sharp 3.4 million barrels, data from the American Petroleum Institute showed.
A Reuters poll of 10 analysts forecast a 1.2 million barrel drop in domestic crude inventories. Gasoline inventories were forecast up 1.2 million barrels, on average, while distillate stocks were projected to rise 1.5 million barrels.
'Seasonality appears to be a positive influence with draw-downs on high U.S. crude oil stocks, to fuel the peak of the U.S. driving season, encouraging buying,' analysts at ANZ said in a note.
Brent will retrace into a range of $101.24-$102.07 per barrel, as suggested by its wave pattern and the RSI indicator, while U.S. oil faces resistance at $89.50 per barrel and may revisit its Tuesday low of $87.41, according to Reuters technical analyst Wang Tao.
(Additional reporting by Manash Goswami and Minh Tran; editing by James Jukwey) Keywords: MARKETS OIL/
(simon.falush@reuters.com)(+44 2075427681)(simon.falush.thomsonreuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2012. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
