Nymex Crude Gains; IEA Sees No Need For SPR Release
Crude futures prices rose for the fourth-straight session Friday as investors grew skeptical about the possibility of a release of strategic oil reserves and the head of the International Energy Agency said there were sufficient supplies in the oil market.
Light, sweet crude for September delivery settled 41 cents, or 0.4%, higher at $96.01 a barrel on the New York Mercantile Exchange.
Brent crude for October delivery on the ICE futures exchange fell 1.4% to $113.71 a barrel in the first day as a front-month contract, though futures still ended $2.60 higher for the week.
U.S. prices hit a fresh three-month high as Maria van der Hoeven, Executive Director of the Paris-based IEA, said there was "no reason" for the release of strategic oil stockpiles because "the market is sufficiently supplied."
The statement followed comments from a White House official earlier this week that the U.S. is reviving talks to release some of its emergency oil reserves amid the recent rise in oil and gasoline prices.
For investors, many of whom were already skeptical about the possibility of a release, Ms. Van der Hoeven's comments suggested that members of the IEA weren't yet moving forward.
"From the IEA standpoint, they may have been putting out a little bit of cover for themselves," should the Obama Administration act, said Tariq Zahir, managing member of Tyche Capital Advisors. He is skeptical that the market needs a further release unless there is a confrontation between Iran and Israel.
"We are well supplied," Mr. Zahir said.
Crude prices have risen 9% since the beginning of August as investors have focused on signals that global supplies of oil have grown tighter in recent weeks. Europe's Brent crude has seen even steeper gains due to maintenance on fields in the North Sea. And the embargo on Iranian crude oil, coupled with rising tensions in Syria and other parts of the Middle East, have put traders on edge.
Still, some analysts believe that prices are likely to remain in a holding pattern until there are further signals about the fate of the broader economy.
"The next chance for the world to really change isn't going to be until the European Central Bank meeting and the jobs numbers," said Jason Schenker, head of Prestige Economics. "Those are the next big deals, and until we get there, we're going to remain in this mid-$90's range."
Front-month September reformulated gasoline blendstock, or RBOB, settled 5.57 cents, or 1.8%, lower at $3.0275 a gallon. September heating oil settled 3.03 cents lower at $3.0926 a gallon.
--Angel Gonzalez contributed to this article
Write to Jerry A. DiColo at email@example.com
Copyright (c) 2012 Dow Jones & Company, Inc.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.