OIL FUTURES: Crude Ekes Out A Gain Ahead Of Long Weekend
May 25 2012 - 4:07PM
Dow Jones News
Oil futures eked out a gain Friday, as traders remained wary of
staking out large positions following inconclusive talks with Iran
and a long weekend in the U.S.
Light, sweet crude for July delivery settled 20 cents, or 0.2%,
higher at $90.86 a barrel on the New York Mercantile Exchange.
Brent crude on the ICE futures exchange settled 28 cents higher, or
up 0.3%, at $106.83 a barrel.
Futures squeezed out a modest gain after spending most of the
session little changed, with trading light ahead of the long
Memorial Day weekend in the U.S. A two-day meeting in Baghdad
between Iran and major world powers over Tehran's nuclear program
produced no breakthroughs, although additional talks are scheduled
in Moscow next month.
With few developments out of Iran and the market awaiting
additional news on the fate of the euro zone, prices have likely
found a new trading range between $85 and $95 a barrel for the near
term, said Rich Rafferty, oil broker at Penson Futures.
"I think you'll see a little consolidation from here on out," he
said. "But you still have the European concern and the fear that
Greece goes down, which they probably will."
Iran has faced increasingly stringent sanctions over its nuclear
program, which Western countries fear is aimed at developing a
nuclear weapon. The escalating tensions were a major factor behind
oil's rise earlier this year to nearly $110 a barrel, although
prices have cooled off considerably since official talks began with
a meeting in Istanbul last month.
A fresh round of talks between Iran, Russia, the U.S., China,
the U.K. and France is scheduled to take place in Moscow on June
18-19.
Despite Friday's gain, benchmark futures on the Nymex fell 1%
this week, largely amid concerns about Greece's possible exit from
the euro zone. Oil market watchers fear that a Greek exit will
destabilize the currency union, ultimately denting economic growth
and curbing oil demand.
"If something happens in Europe, all bets are off. This crude
oil is going lower," said Mark Waggoner, president of Excel Futures
in Bend, Ore.
However, prices have the potential to go higher, Waggoner said,
assuming the U.S. economy continues its recent pick-up. Although
Europe continues to show weakness, the U.S. remains the world's
biggest oil consumer and demand there is a major driver of
prices.
Friday saw a better-than-expected reading on U.S. consumer
confidence. The Reuters/University of Michigan consumer sentiment
index indicated that domestic consumers are more upbeat than they
have been since the most recent U.S. recession.
"We're at a support level right here," Waggoner said. "I think
demand is going to pick up and we're going to go up."
Front-month June reformulated gasoline blendstock, or RBOB,
settled 1.64 cent, or 0.6%, higher at $2.8929 a gallon. June
heating oil settled 0.69 cent, or 0.2%, higher at $2.8288 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
-By Dan Strumpf, Dow Jones Newswires; 212-416-2818;
dan.strumpf@dowjones.com