Crude futures rise on militant attacks in Algeria

17 January 2013 15:01  [Source: ICIS news]

LONDON (ICIS)--The front-month March ICE Brent contract gained more than $1.00/bbl on Thursday finding support from militant attacks in Algeria, falling stocks in the US and a successful Spanish bond auction.

By 14:02 GMT, the front-month March ICE Brent contract touched an intra-day high at $110.80/bbl, a gain of $1.12/bbl compared with Wednesday's settlement. The contract then edged a little lower to trade around $110.75/bbl.

At the same time, the front-month February NYMEX WTI contract was trading around $95.10/bbl, having touched an intra-day high at $95.23/bbl, a gain of 99 cents/bbl compared with the previous settlement. The contract then edged lower to trade around $95.10/bbl.

Crude oil futures found support after Islamist militants attacked a gas plant based in Algeria and took western workers as hostages.

The attack on the gas plant is raising concern that oil facilities in Algeria could also be attacked and oil shipments could be delayed. Algeria produces a number of crudes, including the gasoline and naphtha rich Saharan Blend, which is popular in the Mediterranean, it is also frequently sold to the US and in recent months to the Asia-Pacific region.

Meanwhile, the US Energy Information Administration published its weekly report on Wednesday showing an unexpected drop in US crude oil inventories which is also giving the market a bullish tone.

In Europe, Spain successfully completed a bond auction at much lower borrowing rates. Spain sold €2.41bn ($3.21bn) with an average yield of 2.713%, down from 3.358% in its December bond auction. The lower borrowing rate indicates that investors are more confident with Spain’s ability to repay its debts.

($1 = €0.75)

By: Kawai Wong
+44 20 8652 3214

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