U.S. oil futures finished nearly unchanged Monday, as traders weighed additional signs of weak global oil demand against the prospect of supply disruptions in the Middle East.
Light, sweet crude for November delivery settled a penny lower at $91.85 a barrel on the New York Mercantile Exchange. But Brent crude on the ICE futures exchange, the European benchmark, settled $1.18, or 1%, higher at $115.80 a barrel.
Nymex crude traded as low as $89.79 earlier in the session, but clawed back its losses as concerns over rising tensions in the Middle East kept traders from pushing prices lower. Several market participants pointed to an article in the German magazine Der Spiegel, which said Iran could create a massive oil spill to block the flow of crude through the Strait of Hormuz.
"There was some attention given to that Der Spiegel article," said John Kilduff, founding partner at Again Capital. "There's an upward bias here."
Oil futures spent much of the day in the red, as market participants remained focused on slowing global oil demand. Last week, the International Energy Agency cut its outlook for oil-demand growth this year and said it sees higher production than previously thought thanks to rising output in the U.S., Iraq and Libya.
On Saturday, the Organization of Petroleum Exporting Countries said during a meeting with the International Monetary Fund that it expects the market to remain well supplied into next year.
"There have been a couple of downgrades in terms of projected (oil) demand growth," said Kyle Cooper, managing partner at IAF Advisors in Houston. "The demand situation does remain very, very tepid."
Oil prices have been on a steady downward trend in recent months, as economic troubles in Europe and a tepid recovery in the U.S. curb demand for oil and refined products like gasoline. U.S. prices topped $100 in September but have fallen steadily since.
Underpinning prices, however, remains the threat of supply disruptions due to intensifying unrest in the Middle East. Border skirmishes between Turkey and Syria in recent weeks have raised fears that the civil war in the latter country is spreading to its neighbors, potentially disrupting key oil-transit routes in Turkey or elsewhere.
Over the weekend, Der Spiegel reported that Western officials had obtained a report outlining an Iranian plan to disrupt shipping through the Strait of Hormuz by creating a vast oil spill. The strait is one of the world's most important oil-shipping channels.
Front-month November reformulated gasoline blendstock, or RBOB, settled 4.25 cents, or 1.5%, lower at $2.8503 a gallon. November heating oil settled 1.48 cents, or 0.5%, lower at $3.2091 a gallon.
Copyright (c) 2012 Dow Jones & Company, Inc.
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