US crude futures surge $1.25/bbl on geopolitical uncertainties

17 January 2013 20:46  [Source: ICIS news]

HOUSTON (ICIS)—NYMEX light sweet crude (WTI) for February delivery settled at $95.49/bbl, up $1.25 versus the previous close, driven by concerns regarding the hostage crisis at a gas plant in Algeria and potential global ramifications.

The crisis highlighted the vulnerability of energy installations throughout the region and potential retaliation for events elsewhere.

Crude futures also tracked a rally in the stock market in response to upbeat US economic data showing a decline in jobless claims and an improvement in housing starts, which could translate eventually into higher demand for commodities.

In the currency markets, the euro shifted higher against the dollar, making dollar-denominated commodities more attractive.

Upside momentum lifted the February WTI contract to establish the session’s high at $96.04/bbl, up $1.80, before retreating on sentiment that the rally had been overdone.

On the first day as front month, ICE Brent for March delivery established an intra-day high of $111.38/bbl but retreated to settle at $111.10, up $1.42.  

By: Ignacio Sotolongo
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