Oil gains the most in one week as Middle East tensions simmer
Iranian warships reportedly on their way to Suez Canal
By Claudia Assis and Sarah Turner, MarketWatch
SAN FRANCISCO (MarketWatch) — Crude-oil futures settled on Thursday at the best level in one week, extending gains made this week as tensions continued to simmer in the Middle East and the dollar was weaker.
Crude for March delivery /quotes/comstock/21n!f:cl\h11 (CLH11 87.33, +0.97, +1.12%) rose $1.37, or 1.6%, to $86.36 a barrel on the New York Mercantile Exchange. Natural-gas futures settled 1.4% lower after the government’s latest report on weekly inventories.
The crude contract gained 0.8% in the previous session, amid continued protests in Bahrain, Yemen and other Arab countries, punctuated by reports that Iranian warships would be headed to Syria via Egypt’s Suez Canal.
On Thursday, Iranian state TV confirmed the reports, saying warships are on their way to the canal, according to media accounts. Details were scarce, however.
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The day’s developments in the region also included the break-up of an encampment of demonstrators in Bahrain by police. Protests also took place in Iraq, Libya, and Yemen.
“Mideast tensions [are] providing something of a short-term prop,” said energy analysts at MF Global.
MF Global is looking for further gains in the energy sector, at least in the short term.
“It seems that investors are content buying the dips, and we likely will see energy prices (at least in the Brent complex) maintain their gains for a little while longer,” the analysts said.
Brent for April delivery turned lower, and settled $1.15, or 1.2%, off at $102.59 a barrel on ICE Futures in London. It had earlier traded as high as $104.24 a barrel.
Meanwhile, futures prices for other energy products in New York were mixed Thursday.
Natural gas for March delivery /quotes/comstock/21n!f:ng\h11 (NGH11 3.87, -.00, -0.03%) declined 5 cents, or 1.4%, to settle at $3.87 per million British thermal units.
The Energy Information Administration reported that gas in storage dropped by 233 billion cubic feet in the week ended Feb. 11. Analysts polled by Platts had expected a decline of 235 billion to 239 billion cubic feet.
The drawdown was larger than the 190 billion cubic feet seen in the same week of 2010 and above the five-year average decrease of 150 billion cubic feet.
Natural gas futures were also responding to a forecast that warmer weather over the midwest will expand to the East Coast on Friday.
Gasoline for March delivery (RBH11 2.53, -0.01, -0.52%) retreated 2 cents, or 0.7% to settle at $2.53 a gallon.
Claudia Assis is a San Francisco-based reporter for MarketWatch. Sarah Turner is MarketWatch’s bureau chief in Sydney.