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Oil
posts second monthly rise, tops $114 after Bernanke
Oil
rose above $114 a barrel in volatile trading on Friday, taking gains
in August above 9 percent, after U.S. Federal Reserve Chairman Ben
Bernanke stopped short of signaling extra monetary easing was
imminent but kept the door open for action.
31
August, 2012
Crude
initially pulled back after Bernanke's address at a central bankers'
symposium in Jackson Hole, Wyoming. As traders parsed the details,
prices were quick to move higher, supported by stronger-than-expected
U.S. economic data.
Figures
released on Friday showed U.S. factory orders posted the biggest rise
in 12 months in July, jumping 2.8 percent, while the Thomson
Reuters/University of Michigan survey of consumer sentiment showed
the index rising to 74.3 in August from 73.6 in a preliminary August
report.
"There
was no announcement about if more stimulus was coming immediately,
but he (Bernanke) said the Fed was ready to act if necessary so that
was supportive," said Gene McGillian, analyst at Tradition
Energy in Stamford, Connecticut.
"Along
with the factory orders and consumer sentiment data, the (market)
longs are in control."
Brent
crude settled up $1.92 at $114.57 a barrel, having earlier reached a
session peak of $114.78. Brent gained 9.2 percent in August, the
biggest monthly percentage rise since prices jumped by 10.5 percent
in February, and added to a 7 percent rally in July.
U.S.
crude rose $1.85 to settle at $96.47, having earlier risen briefly
above the 200-day moving average at $96.68, a key technical
resistance level closely watched by traders. U.S. crude gained 9.6
percent in August, the biggest percentage gain since October 2011.
September
U.S. heating oil, the benchmark distillate futures contract, expired
at $3.1696 a gallon, up 4.51 cents on the day and up 11.5 percent in
August, biggest monthly percentage gain since September 2010.
September
RBOB gasoline rose 2.30 cents to go off the board at $3.1056 a
gallon, up 6.5 percent in August, following a 6.8 percent rise in
July.
Money
managers raised their net long U.S. crude futures and options
positions in the week to August 28, the Commodity Futures Trading
Commission said on Friday.
Quantitative
easing is viewed by many investors as likely to boost the price of
commodities and other hard assets as it tends to depress the value of
the dollar.
The
euro rose against the dollar on Friday, boosted by signs of progress
toward a deal to tackle the euro zone debt crisis.
Trading
volume was relatively buoyant ahead of a long weekend in the United
States, with Brent turnover 6 percent over the 30-day average. U.S.
crude volume lagged its 30-day average by 5 percent at 3 pm in New
York.
U.S.
markets will be closed on Monday for the U.S. Labor Day holiday.
STRATEGIC
RESERVES IN FOCUS
Crude
prices were further supported by reports Germany and Italy remain
opposed to a release of emergency consumer oil stocks, which created
further uncertainty about the timing of any possible release as
sanctions on Iranian exports have tightened the market and boosted
prices.
Since
mid-June Brent prices have risen by more than 25 percent, from below
$90 a barrel to near $115 now.
Meanwhile,
the Department of Energy loaned 1 million barrels of light sweet
crude oil to Marathon Petroleum Corp (MPC.N) from the U.S. Strategic
Petroleum Reserve (SPR) due to short-term supply problems created by
Hurricane Isaac.
"This
emergency loan from the Strategic Petroleum Reserve will help ensure
Marathon's refining operations have the crude oil they need to
continue operating," Energy Secretary Steven Chu said.
The
DOE added it continues to "keep all options on the table to
address additional or sustained oil supply issues."
Overall,
however, the Gulf of Mexico oil and gas industry has so far reported
little major storm-related damage to infrastructure although one
Louisiana refinery had flooding. Energy production is expected to
start ramping up again over the weekend.
Traders
said oilfield maintenance in the North Sea was also boosting prices,
with a potential strike by Norwegian oil workers looming just weeks
after a walkout lasted 16 days and stopped 13 percent of Norway's oil
production.
Norwegian
oil drilling workers may strike on Sunday at installations operated
by KCA Deutag in two North Sea fields, but production will not be
affected, a union leader said Friday.
Fighting
in Syria and tension over Iran's nuclear program also lent support.
A
U.N. report said on Thursday Iran had doubled the number of uranium
enrichment centrifuges it has in an underground bunker, showing
Tehran has expanded its nuclear work despite Western pressure and the
threat of an Israeli attack.
Other
stories
Power
outage disrupts trains (South
Africa)
Japan
too has great hopes for methane hydrates, but it's unlikely they are
economically viable. -- RF
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