--Crude rallies in wake of refinery fire
--Gains reverse nearly all of Wednesday's losses
--Syria-Turkey skirmish lifts oil
By Dan Strumpf
NEW YORK--Oil futures rallied sharply Thursday, reversing much
of the previous day's losses, as disruptions to the gasoline market
and a border skirmish between Turkey and Syria pulled prices
higher.
Light, sweet crude for November delivery settled $3.57, or 4.1%,
higher at $91.71 a barrel on the New York Mercantile Exchange.
Brent crude on the ICE futures exchange recently rose $4.25, or
3.9%, to $112.42 a barrel.
A rally in the gasoline market pulled oil prices higher after
Exxon Mobil Corp. (XOM) reported a fire at a unit of its Baytown,
Texas, refinery. The fire was extinguished by Wednesday evening,
Exxon said, but would affect an unspecified amount of
production.
The Baytown facility is the U.S.'s largest operating refinery, a
five-mile facility capable of churning 584,000 barrels a day of
crude into refined products. November reformulated gasoline
blendstock, or RBOB, settled 14.34 cents, or 5.1%, higher at
$2.9429 a gallon on the news.
"The Baytown problem must be a pretty serious situation," said
Tony Rosado, broker at Dorado Energy Services in New York. "This is
a physical scenario impacting the industry and pricing."
Also lifting gasoline was a partial shutdown of the Colonial
Pipeline. The operator said Lines 19 and 20, which transport
gasoline and distillate products from Atlanta to Nashville, were
shutdown due to reports of a gasoline odor.
Events such as refinery or pipeline outages often lift fuel
prices as supplies grow tighter and traders scramble to meet
obligations. The rise often lifts the price of crude.
Thursday's rally nearly reversed all of crude's losses on
Wednesday, when oil plunged more than 4% to its lowest level all
year on concerns of weakening demand from China.
Sluggish growth in China, the world's second-biggest oil
consumer, has weighed on the oil market for months. Meanwhile, in
the U.S., the world's biggest consumer, oil demand remains
depressed as high unemployment continues to curb gasoline needs.
Economists expect unemployment to hold steady at 8.1% when the
Labor Department reports its closely watched October nonfarm
payrolls report.
Other factors supported crude prices on Thursday. Turkey's
parliament approved a measure giving the government powers to send
soldiers into Syria after both sides traded fire over the last two
days. The tensions are raising fears that Syria's civil war is
spilling over into neighboring countries, further inflaming fears
over Middle East supply disruptions.
"It's still going to be geopolitical concerns that help to
cushion" oil prices, said Andy Lebow, senior vice president of
energy futures at Jefferies Bache. "Today's, it's Turkey and Syria.
Tomorrow, it could be Iran and Syria."
Meanwhile, prices were also supported by a weakening dollar,
which slumped against the euro after the European Central Bank
reaffirmed its pledge to buy the debt of troubled euro-zone states.
A weaker dollar typically lifts oil prices by making the
dollar-denominated commodity more attractive for holders of other
currencies.
The euro was recently up 0.9% at $1.30185.
November heating oil settled 12.2 cents, or 4%, higher at
$3.1884 a gallon.
More information on settlements and highs and lows for futures
on Nymex and ICE platforms can be found by searching for the
following headlines:
Nymex Light Crude Oil Close
Nymex Harbor RBOB Gasoline Close
Nymex Heating Oil Close
ICE Brent Crude Oil Close
ICE Gas Oil Close
-Rose Marton-Vitale and Emre Peker contributed to this
story.
Write to Dan Strumpf at dan.strumpf@dowjones.com