Oil Gains On Mideast Uncertainty, Higher Dollar

Crude-oil futures extended gains in electronic trading Thursday amid a falling dollar and uncertainty in the Middle East despite a cease-fire between Israel and Hamas.

Benchmark U.S. crude oil for January delivery  rose 26 cents, or 0.3%, to $87.64 a barrel on Globex during Asia trading hours.

Thursday’s gains came after the January contract settled at $87.38 a barrel for a gain of 0.7% in Wednesday’s regular session on the New York Mercantile Exchange.

Nymex floor trading was scheduled to close Thursday for Thanksgiving, with an abbreviated session slated for Friday.

GFT technical analyst Fawad Razaqzada said it looks like crude oil is forming a bottom.

The benchmark contract “broke through a bearish trend line on Friday, and although the bounce proved short-lived in nature, traders are now apparently ‘buying the dip,’” Razaqzada said, adding he expects fresh buyers once oil futures close above $89.30 a barrel, as that would confirm the new trend.

On the Middle East uncertainty, he said: “Anymore escalation of the situation between Israel and Palestine, or indeed any other supply-related issues, will most likely push prices further higher.”

A lower dollar also helped crude, as the ICE dollar index , which measures the greenback against a basket of six other currencies, slipped to 80.835, compared with 80.937 in late North American trade Wednesday.

Dollar-denominated commodities such as crude oil tend to fall when the U.S. unit rises, as this makes oil more expensive to holders of other currencies.

Among other energy futures Thursday, heating oil for December delivery  rose less than 0.1% to $3.07 a gallon, and gasoline for delivery in the same month  edged up 0.3% to $2.76 a gallon.

Natural-gas futures for December delivery  rose 0.3% to $3.92 per million British thermal units.

Marketwatch