Crude-oil futures edged upward Tuesday in a choppy session, as investors shifted their focus from the increased threat of supply disruptions from Iran after the U.S. issued fresh sanctions late Monday to the Greek debt situation ahead of a key meeting between political leaders due late Tuesday to discuss tough austerity measures demanded by the European Union.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in March traded at $97.02 U.S. a barrel at 0720 GMT, up $0.11 in the Globex electronic session. March Brent crude on London's ICE Futures exchange rose $0.12 to $116.05 U.S. a barrel.
Nymex crude will likely trade sideways this week between the 200-day moving average of $94.80/bbl and the 50-day moving average of $99.15/bbl, Stephen Schork said in a note. But "if bullets start flying in Iran, or the United Nations acts on Syria, the sky is the limit" for the U.S. benchmark, also referred to as West Texas Intermediate, or WTI.
South Sudan continues to keep its oil production offline, while Syrian and Yemeni volumes remain largely off the market, taking a combined one million barrels a day of oil output off the market, Barclays Capital said in a report.
The recent violence in top African producer Nigeria is also a key risk to the oil market, BarCap said, adding that it expects crude to maintain an upward bias in the coming weeks.
Meanwhile, the WTI-Brent spread will likely widen beyond $20 U.S./bbl in the coming days, said some experts.
Brent will likely derive support from concerns about disruptions to Iranian crude that are forcing southern European refiners to seek alternative supply sources, while WTI could see downward pressure due to rising inventories, he said.
Investors will be focusing on Greece-related headlines late Tuesday, said analysts
Prices could get a boost if the debt-laden country makes some headway in finalizing its reforms, which will open access to the next tranche of its bailout package, he said.
Nymex reformulated gasoline blendstock for March -- the benchmark gasoline contract -- fell 24 points to $2.9255 U.S. a gallon, while March heating oil traded at $3.1832 U.S., 125 points higher.
ICE gasoil for February changed hands at $992.50 U.S. a metric ton, up $4.25 U.S. from Monday's settlement.
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