Crude rises back above $96/bbl

09 November 2007 06:21  [Source: ICIS news]

SINGAPORE (ICIS news)--Crude futures strengthened in early Asian trade on Friday after two days of declines, with NYMEX light sweet crude (WTI) gaining $1/bbl to climb back above $96/bbl, supported by supply concerns and a weak US dollar.

At 4:46 GMT on Friday, December NYMEX light sweet crude futures were trading at $96.37/bbl, up $0.91/bbl on Thursday’s close after earlier peaking at $98.48/bbl up $1.02/bbl.

Meanwhile, December ICE Brent futures were trading at $93.43/bbl, up $0.64/bbl on the previous close, after earlier hitting a high of $93.47/bbl up $0.68/bbl.

Comments on Thursday by the US Federal Reserve Chairman suggesting slow economic growth provided downside momentum for the sell off on Thursday.

Prices had plunged off intra day record highs on Wednesday after weekly US inventory data failed to provide any surprises, with the decline in crude stocks generally in line with expectations.

Supply concerns, meanwhile, were heightened by severe storms in the North Sea which resulted in the shut-in of over 500,000 bbl/day of production and the evacuation of platforms on Thursday.

Worries over low crude and product inventories ahead of the northern hemisphere winter remained a major driver in the market.

In a report issued earlier this week, the US Energy Information Administration (EIA) said that strong demand and OPEC reluctance to raise output would push down stocks held by leading nations to below the five year average by the end of the year.

The weak US dollar has also fuelled buying interest in crude and products futures from the financial sector amid expectation of crude oil hitting $100/bbl in the near term. 

Crude prices also continue to be supported by Middle East geopolitical tensions generated by the Iranian nuclear issue and the struggle between Kurdish rebels and Turkish forces.

By: James Dennis
+65 6780 4359

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