Oil Bounces Back On Mideast Woes, Inventory Data

Crude-oil futures gained in electronic trading Wednesday, bouncing back after recent declines, as Israel and Hamas had yet to reach a cease-fire, and as data showed an unexpected slide in crude inventories.

Benchmark U.S. crude oil for January delivery  rose 39 cents, or 0.5%, to $87.14 a barrel on Globex during Asia trading hours.

The gains came after the January contract settled at 86.75 a barrel in Tuesday’s regular session on the New York Mercantile Exchange, an almost 3% drop, as hopes for a Gaza Strip cease-fire relieved some of the concerns over supply risks in the Middle East.

After Tuesday’s settlement, the American Petroleum Institute reported a surprise decrease for oil inventories, saying that crude supplies fell 1.9 million barrels for the week ended Nov. 16

The more closely watched U.S. Energy Information Administration report was due out Wednesday, with analysts polled by Platts expecting a 1 million-barrel increase in crude-oil stocks.

But GFT technical analyst Fawad Razaqzada said the fighting in Gaza remained a key focus: “If the situation escalates, then that will be reflected in even higher oil prices.”

He said resistance for the Nymex crude-oil contract comes in the range between $89 and $90. “A close above [this] range would be bullish for oil,” he said.

Among other energy futures Wednesday, heating oil for December delivery  rose 0.6% to $3.06 a gallon, and December gasoline  also climbed 0.6% to $2.73 a gallon.

Natural-gas futures for December delivery  fell 0.1% to $3.83 per million British thermal units.

Marketwatch