Oil rises on Mid­dle East ten­sions, weaker dol­lar

US crude stocks likely to show weekly build: Sur­vey

Kuwait Times - - BUSINESS - Edi­son to com­plete seis­mic sur­vey of Zohr field area

LON­DON: Oil prices rose yes­ter­day as ten­sions in the Mid­dle East es­ca­lated fol­low­ing the down­ing of a Rus­sian-made fighter jet near the Syr­ian-Turk­ish border and a weaker US dol­lar pro­vided in­cen­tive for in­vestors to buy more oil. Brent fu­tures for Jan­uary were up 44 cents to $45.27 a bar­rel at 1055 GMT, a 1 per­cent rise on Mon­day’s close. West Texas In­ter­me­di­ate (WTI) crude was up 33 cents at $42.08.

“News of a mil­i­tary jet crash­ing in Syria is a re­minder that there is still sub­stan­tial risk in the Mid­dle East,” said Bjarne Schiel­d­rop, the Olso-based chief com­modi­ties an­a­lyst at SEB. Tur­key said it had downed a Rus­sian-made fighter jet near the Syr­ian border af­ter it vi­o­lated Ankara’s airspace. A weaker US dol­lar, eas­ing from an eight-month peak against a bas­ket of cur­ren­cies, also lent sup­port as some in­vestors found it cheaper to buy the dol­lar-de­nom­i­nated com­mod­ity.

They also awaited US crude stocks data, with expectations of a small in­crease.

US com­mer­cial crude oil stocks likely gained 1.1 mil­lion bar­rels for the week ended Nov 20, ac­cord­ing to a pre­lim­i­nary Reuters sur­vey of five an­a­lysts on Mon­day. A rise would mark a ninth con­sec­u­tive weekly gain.

Some traders also pre­pared po­si­tions ahead of a long hol­i­day week­end in the United States. “There is likely to be a risk pre­mium for the long Thanks­giv­ing week­end,” said Olivier Jakob, oil an­a­lyst at Petro­ma­trix in Zug, Switzer­land.

An­a­lysts at BNP Paribas said they ex­pected U.S. WTI crude fu­tures to re­cover slightly this win­ter. “We still think that a low 40s NYMEX WTI is a floor from which the mar­ket can rally through the win­ter,” they wrote in a re­search note.

“There­after, the sum­mer of 2016 presents down risk for oil prices as OPEC pur­sues its cur­rent pol­icy, US pro­duc­tion sta­bi­lizes and Iran de­liv­ers more bar­rels to the mar­ket.” Saudi Ara­bia led a shift by the Or­ga­ni­za­tion of the Petroleum Ex­port­ing Coun­tries (OPEC) in Novem­ber 2014 to de­fend mar­ket share against com­pet­ing sup­plies, rather than cut out­put to prop up prices. The Saudi cab­i­net said on Mon­day it was ready to co­op­er­ate with OPEC and non-OPEC coun­tries to achieve mar­ket sta­bil­ity, days be­fore OPEC meets to re­view its pol­icy. — Reuters CAIRO: Italy’s Edi­son will com­plete its seis­mic sur­vey of the area sur­round­ing Egypt’s Zohr gas field next month, the head of Egypt’s Gen­eral Petroleum Corp (EGPC) told re­porters yes­ter­day. “The dis­cov­ery of the Zohr gas field helped ac­cel­er­ate the com­pa­nies’ re­search and ex­plo­ration,” Mo­hamed Al-Masry said on the side­lines of a con­fer­ence in Cairo. The seis­mic sur­vey was pre­vi­ously ex­pected to be com­pleted af­ter 11/2 years. Al-Masry also said EGPC had met with ENI, which dis­cov­ered the Zohr gas field in Au­gust, to ne­go­ti­ate the price of the gas that will be ex­tracted. “The price is linked to a price for­mula with a min­i­mum of $4 per mil­lion BTU and a limit of $5.88 per mil­lion BTU, and the price will not ex­ceed that,” he said.

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