Crude Oil up in Asian Trade on Yellen Comments, Iraq Violence

Crude Oil up in Asian Trade on Yellen Comments, Iraq Violence

By Eric Yep
Crude-oil futures rose in Asian trading on Friday in line with positive sentiment in wider financial markets after the U.S. Federal Reserve Vice Chairwoman Janet Yellen hinted at continued bond buying.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at $94.17 a barrel at 0530 GMT, up $0.41 in the Globex electronic session. January Brent crude on London’s ICE Futures exchange rose $0.16 to $108.44 a barrel.

Ms. Yellen, who is also the nominee to be the next Federal Reserve chief, signaled on Thursday the U.S. economy must strengthen before bond buying can be tapered–especially when recovery remains fragile.

“Her comments suggest that the recent good nonfarm payrolls numbers are unlikely to trigger a tapering of asset purchases in December and leave us more comfortable with our call that a March move is more probable,” ABN Amro says in a note.
The resulting weakness in the dollar supported oil prices and helped offset bearish U.S. oil inventory data.

U.S. crude-oil stocks rose by 2.6 million barrels in the week ended Nov. 8, according to the Energy Information Administration–compared with analyst estimates of a 1 million-barrel rise.

The crude overhang that has been exacerbated by recent refinery maintenance in the U.S. is unlikely to dissipate quickly with a pick up in refinery runs given continuing strong growth in crude output, BNP Paribas said in a note.
It said U.S. crude production has risen to a level last seen in January 1989 and “continues to overwhelm the U.S. refining sector even after moderated imports are taken into consideration.”

Brent crude is supported by continuing unrest in the Middle East resulting in a wide premium of the European benchmark to Nymex WTI crude. The Brent-WTI spread has widened to around $14.29 a barrel.
Blasts killed more than 40 people in Iraq on Thursday in rallies to commemorate the Shiite holy day of Ashura as tensions between Shiite and Sunni Muslims escalated.

Earlier this week Baker Hughes Inc. suspended operations in Iraq, OPEC’s second-largest oil producing region, because of protests at a facility belonging to one of its units.

Meanwhile, the United Nations reported that Iran has virtually frozen the expansion of its vast nuclear program since President Hasan Rouhani took office in August.

Nymex reformulated gasoline blendstock for December–the benchmark gasoline contract–rose 52 points to $2.6889 a gallon while December heating oil traded at $2.9336, 30 points higher.

ICE gasoil for December changed hands at $911.00 a metric ton, up $2.25 from Thursday’s settlement
Source: pukmedia

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