29 November 2012 21:44 [Source: ICIS news]
HOUSTON (ICIS)--US West Texas Intermediate (WTI) crude futures rose by $1.58/bbl over the previous day's session on Thursday, amid heightened tensions in the Middle East.
January WTI crude futures settled at $88.07/bbl, while January Brent crude futures settled at $110.76/bbl, up $1.25 over the Wednesday session.
After falling the previous day, crude futures rose early in trading and remained higher throughout the session, as turmoil in Egypt and other areas in the Middle East created supply concerns.
The US dollar also declined against leading currencies such as the euro.
Also, early talk of a potential agreement between the White House and Congressional Republicans over the so-called fiscal cliff raised hopes that a recession might be avoided and demand for crude would increase in early 2013. Those hopes were mitigated somewhat by later dour statements by US House Speaker John Boehner about the possibility of an austerity agreement.
The fiscal cliff is the increase in US income tax rates and sharp cuts in federal government spending that will kick in on 1 January.
The rate increases and spending cuts are mandatory, unless the White House and Congress can engineer a budget resolution in the next few weeks to eliminate most, if not all, of the mandated tax hikes and spending reductions.
Meanwhile, protests continued in Egypt in response to the decision last week by the nation's president to greatly extend his powers. The move is opposed by opposition parties and the Egyptian judiciary. However, the Egyptian assembly – which is dominated by the president’s party, the Muslim Brotherhood – is in the process of writing a new constitution.
Meanwhile, the on-going civil war in Syria and the standoff between the west and Iran over Tehran’s nuclear programme continued to raise concerns over the security of crude supply from the Middle East. Nevertheless, the ceasefire continued to hold between Israel and Hamas forces in Gaza.
Weekly US inventory data from the US Government’s Energy Information Administration (EIA) revealed an unexpected 347,000 bbl fall to 371.1m bbl. However, gasoline inventories rose by a much larger than expected 3.87m bbl.
Additional reporting by James Dennis
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