Top Stories
US crude futures climb back into positive territory
Global Banking & Finance Review®
Company
By Erwin Seba
HOUSTON (Reuters) -U.S. crude futures returned to positive territory on Monday after falling on easing fears of a wider Mideast conflict.
U.S. West Texas Intermediate crude was up 0.03 cents or 0.04% at $83.17 a barrel at 9:46 a.m. CDT (1446 GMT). The front-month WTI crude contract for May expires on Monday.
Brent crude futures were down 48 cents, or 0.55%, at $86.77 a barrel.
Both benchmarks had been down more than $1 a barrel. Early on Friday, prices for WTI and crude climbed than $3 a barrel, after explosions were heard in the Iranian city of Isfahan in what sources described as an Israeli attack.
Gains dissipated after Tehran played down the incident and said it did not plan to retaliate.
Geopolitical risk premiums tend not to last if supply is not actually disrupted, said UBS strategist Giovanni Staunovo, adding that the high spare capacity of a few oil-producing countries could compensate for any supply disruptions.
The market reaction to the rising geopolitical temperature was another example that it is only reasonable to expect a protracted oil rally if the Strait of Hormuz- the world’s most important oil artery – was disrupted or Saudi Arabia directly drawn into the conflict, noted Tamas Varga of oil broker PVM.
Meanwhile, plentiful supplies of some of the biggest crude grades are limiting the impact on oil futures of conflict in the Middle East, a Reuters analysis found.
On the economic front, inflation is back in focus, with comments from Federal Reserve officials and a run of hotter-than-expected inflation data forcing a paring back of rate cut expectations last week.
Economic concerns have again become a bearish factor of the crude market, with prices under pressure due to a large build in the U.S. stockpile and a hawkish Fed that has led to a strong dollar, said independent market analyst Tina Teng. [EIA/S]
A strong dollar makes oil more expensive for holders of other currencies. [USD/]
(Reporting by Erwin Seba; erwin.seba@thomsonreuters.com; Additional Reporeting Deep Vakil in Bengaluru, Natalie Grover in London, Colleen Howe in Beijing and Jeslyn Lerh in Singapore; Editing by Louise Heavens, Alex Lawler, Bernadette Baum and Alexander Smith)
Crude oil is a natural, unrefined petroleum product composed of hydrocarbon deposits and other organic materials. It is extracted from the ground and refined into various fuels and other products.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured by the Consumer Price Index (CPI) or Producer Price Index (PPI).
West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing. It is known for its high quality and low sulfur content, making it desirable for refining.
A strong dollar refers to a situation where the U.S. dollar has a high value compared to other currencies. It can affect international trade, making U.S. exports more expensive and imports cheaper.
Explore more articles in the Top Stories category
