Oil prices little changed though US reserve bid lends support
Shafaq News/Oil prices were little changed on Tuesday after falling in the previous sessionas a U.S. plan to buy oil for the Strategic Petroleum Reserve (SPR) providedsome support though wider concerns about weaker future demand growth exertedpressure.
Brent crudefutures climbed 3 cents to $71.45 a barrel by 0415 GMT, while U.S. West TexasIntermediate crude was up 7 cents at $67.45 a barrel.
Bothcontracts tumbled 6% on Monday to their lowest since Oct. 1 after Israel'sretaliatory strike on Iran at the weekend bypassed Tehran's oil infrastructure.With signs that neither country seemed likely to escalate the conflict afterthe attack, investor concerns about flagging global oil demand growth for thisyear and next rose to the fore.
"Whileoutlook for the Middle East situation remains alarming, the market is expectinga temporary lull in retaliatory strikes between Israel and Iran," saidHiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.
"TheU.S. plan to refill the SPR provided some support to the market," he said,but predicted a downward trend ahead as peak winter kerosene demand season inthe Northern Hemisphere was still some way off while demand in China remainedsluggish.
The U.S. onMonday said it was seeking up to 3 million barrels of oil for the SPR fordelivery through May next year, a purchase that would leave the government withlittle money to buy more until lawmakers approve more funds.
On Saturday,scores of Israeli jets completed three waves of strikes against missilefactories and other sites near Tehran and in western Iran, the latest exchangebetween the Middle Eastern rivals.
The attackswere more tailored toward military targets, easing fears that Israel mightattack Iran's nuclear facilities or oil infrastructure.
"Thetargeted response from Israel does leave the door open for de-escalation, whichwould allow fundamentals once again to be the dominant driver for themarket," said ING Economics analysts in a report, adding that fundamentalsare expected to be bearish through 2025.
Tensions inthe Middle East remain high, however, as Iranian Foreign Ministry spokespersonEsmaeil Baghaei said on Monday that Iran will "use all availabletools" to respond to Israel's weekend attack.
The U.S.warned Iran at the United Nations Security Council of "severeconsequences" if it undertakes any further aggressive acts against Israelor U.S. personnel in the Middle East.
In the U.S.,crude oil and gasoline stockpiles likely rose last week, while distillateinventories were seen down, a preliminary Reuters poll showed on Monday.
The AmericanPetroleum Institute industry group is scheduled to release a weekly report onTuesday and the Energy Information Administration, the statistical arm of theU.S. Department of Energy, will issue one on Wednesday.
(Reuters)
