Oil prices choppy on Middle East, Gulf of Mexico fire

NEW YORK Fri Nov 16, 2012 11:24pm IST

A worker holds up a fuel pump nozzle after filling up the tank of a car at a petrol station in Cairo October 3, 2012. REUTERS/Mohamed Abd El Ghany/Files

A worker holds up a fuel pump nozzle after filling up the tank of a car at a petrol station in Cairo October 3, 2012.

Credit: Reuters/Mohamed Abd El Ghany/Files

Related Topics

NEW YORK (Reuters) - Oil prices rose on Friday as the escalating conflict between Israel and Palestinians reinforced worries about supply in the region while a fire hit a Gulf of Mexico energy platform.

Trading was volatile with the U.S. December crude contract headed toward expiration at the end of Friday's session, following the Brent December contract's expiry the day before.

Front-month January Brent crude briefly turned lower after the U.S. benchmark crude, also known as West Texas Intermediate (WTI), surged more than $1.50 to hit $87 a barrel, as news of the fire on the Gulf of Mexico installation affected the Brent-U.S. crude spread trading.

A fire broke out at an oil and natural gas platform in the Gulf of Mexico, the U.S. Coast Guard said. The Coast Guard told local media that the platform was not actively producing.

"Traders who had been long Brent/short WTI on the Middle East fears reversed that when the platform fire news broke," said Phil Flynn, analyst at Price Futures Group in Chicago.

Brent's premium to U.S. crude, comparing December contracts, edged above $26 a barrel on Thursday, the widest since October 2011. But the spread on Friday, now contrasting January contracts, was below $22 a barrel.

Prior to the platform fire news, the support for crude futures from Middle East turmoil and the potential for supply disruptions in the region had been tempered by concerns about the global economy and a well-supplied market.

Brent January crude rose 41 cents to $108.42 a barrel by 12:29 p.m. EST (1729 GMT), having swung from $107.66 to $109.12.

Expiring U.S. December crude traded up $1.09 at $86.54 a barrel, after touching $87.

U.S. January crude was up $1.04 at $86.91 a barrel, having swung in a range from $85.41 to $87.36.

GAZA CONFLAGRATION EYED

The risk to oil of supply from the region remained as Israel positioned tanks and troops outside Gaza and called up reservists on the third day of the offensive against the Palestinian enclave.

After Iraq's envoy to the Arab League said in Cairo it would invite Arab states to use oil as a weapon to press for a halt to Israeli attacks on Gaza, he later appeared to withdraw the remark, saying Baghdad would make no particular proposal to a League meeting.

Egypt's Prime Minister Hisham Kandil visited the Gaza Strip and a Palestinian official close to Egypt's mediators told Reuters that Kandil's visit "was the beginning of a process to explore the possibility of reaching a truce.

FISCAL CLIFF HANGER

Also on Friday, U.S. President Barack Obama met with top U.S. lawmakers to work on a deal to avert year-end automatic tax hikes and spending cuts.

A report on Friday showing Hurricane Sandy hit U.S. industrial output in October followed other indications of the storm affecting the economy, including a rise in initial jobless last week and a slump in factory activity in the mid-Atlantic region struck by Sandy.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Adani Project

Adani Project

Australia approves Adani's $16 bln Carmichael coal project  Full Article 

India-U.S. Talks

India-U.S. Talks

Kerry to woo Modi's India, but quick progress unlikely  Full Article 

Argentina Debt Default

Argentina Debt Default

Insight - Jaded Argentines brace for looming debt default   Full Article 

Anti-trust Probe

Anti-trust Probe

Microsoft targeted in apparent Chinese anti-trust probe  Full Article 

Mideast Conflict

Mideast Conflict

Israel strikes house of Hamas Gaza leader, digs in for long fight  Full Article 

Stiff Competition

Stiff Competition

China brands beat global rivals with tea toothpaste & pickled plums  Full Article 

Rising From Ashes

Rising From Ashes

With PlayStation network, Sony goes back to the future in search of revival  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage