Oil prices hovered below US$100 a barrel Thursday, with a report showing a jump last week in US crude supplies, countering concerns about Iran’s threat to block a key Middle East oil shipping route.
By early afternoon in Europe, benchmark crude for February delivery rose 29 cents to US$99.65 a barrel in electronic trading on the New York Mercantile Exchange.
In London, Brent crude was up eight cents at US$107.64 a barrel on the ICE Futures exchange.
The American Petroleum Institute said late Wednesday that crude inventories rose 9.6 million barrels last week, while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos, had predicted a drop of 2.3 barrels. The rise is a sign demand could be weakening.
Inventories of gasolene added 1.9 barrels last week, while distillates grew 600,000 barrels, the API said.
Investors are also closely watching developments in the Persian Gulf. On Tuesday, Iran’s vice-president said his country will close the Strait of Hormuz, and cut off crude exports, if Western nations impose sanctions on Iran’s oil shipments.
On Wednesday, the US Navy warned that any disruption of traffic in the strait, though which about a sixth of global production passes, would not be tolerated. A Saudi oil ministry official said his country and other Gulf producers are ready to provide more oil if Iran tries to block the strait.
“(Closing the Strait of Hormuz) would instantly draw all consuming nations into opposition with Tehran,” energy consultant Cameron Hanover said in a report. “The US and its Arab allies would be compelled to open it by military force.
“Under any scenario, that would be a game-changer.”
Gains were limited by the stronger dollar, which usually weighs on crude by making the commodity more expensive for investors trading in other currencies.
The euro was down to US$1.2878 from US$1.2941 late Wednesday in New York.
In other Nymex trading, heating oil rose 1.49 cents to US$2.9161 per gallon and gasolene futures added 0.15 cent at US$2.6471 per gallon. Natural gas futures were up 2.1 cents to US$3.142 per 1,000 cubic feet.
– AP
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