Oil Holds Ground As Saudis Set To Support Output

Oil futures held steady in electronic trade Thursday, as Saudi Arabia said it would backstop any production losses from geopolitical turmoil.

New York-traded crude oil for October delivery  was little changed, down just 3 cents at $107.53 a barrel, while rival benchmark October Brent crude  also traded flat, losing a penny to $111.50 a barrel.

Earlier Thursday, Saudi Oil Minister Ali al-Naimi said his nation and other major producers “remain willing and capable of meeting any additional demand.”

“Clearly, geopolitics and speculation about geopolitics is impacting prices,” al-Naimi said at a meeting of energy ministers in Seoul, according to Dow Jones Newswires.

The remarks came amid recent high volatility in the oil market, as investors judged the likelihood of a U.S. military strike on Syria, and the possible escalation of the conflict to other countries, as well as a drop in output from Libya.

Thursday’s muted oil moves may have also reflected caution ahead of the International Energy Agency’s monthly oil-market report, due out at 4 a.m. U.S. Eastern time.

Oil managed to score modest gains on Wednesday, when benchmark futures rose on both the New York Mercantile Exchange and the ICE Futures market where Brent is traded.

Both Nymex and Brent October futures rose 0.2%, with the U.S. advance coming despite U.S. Energy Information Administration data showing crude stockpiles for the week ended Sept. 6 fell by a smaller-than-forecast 200,000 barrels.

Analysts polled by Platts were looking for a decline of 2 million barrels.

Citi Futures, which recommends shorting both Nymex and Brent crude futures, saw overall fundamental as bearish, citing not only the less-than-expected fall in inventories but also U.S. production figures.

“For the most part, we think oil-futures trade has trained the market to overlook U.S. crude-oil production numbers,” Citi Futures analyst Timothy Evans said in a note, adding that the data showed what “looks like the highest weekly output since May 1989.”

In other energy trading Thursday, October gasoline  was unchanged at $2.71 a gallon, while October heating oil  ticked up by 1 cent, or 0.1%, to $3.08 a gallon.

October natural gas  fell by more than a cent, or 0.4%, to $3.55 per million British thermal units, adding to its 2-cent retreat Wednesday ahead of weekly U.S. natural-gas supply data from the EIA.

Analysts polled by Platts forecast an increase in U.S. nat-gas inventories of 64 billion to 68 billion cubic feet.

Source : MArketwatch