Crude oil futures high in New York, WTI (West Texas Intermediate) little change, crude for January delivery $87.42 a barrel, Brent for January 2013 settlement slid 3 cent.
Crude oil futures traded near the highest level in two days in New York amid concern that a cease- fire between Israel and Hamas may not hold, putting at risk supply from the Middle East.
West Texas Intermediate was little changed after rising as much as 0.5 percent. A cease-fire crafted yesterday by Egypt and the U.S. halted eight days of aerial assaults that ravaged the Gaza Strip and made Tel Aviv a missile target. Floor trading in New York is closed today because of the Thanksgiving holiday. A Chinese manufacturing index signaled the first expansion in 13 months.
“There’s the potential for future price gains due to the shaky nature of the truce in Israel,” Harry Tchilinguirian, BNP Paribas SA’s head of commodity markets strategy in London, said by phone. “We aren’t going to see much today with the U.S. closed and low volumes.”
Crude for January delivery was at $87.42 a barrel, up 4 cents, in electronic trading on the New York Mercantile Exchange at 2:20 p.m. London time. Today’s transactions will be booked with tomorrow’s trades for settlement purposes. The contract climbed 63 cents yesterday to $87.38, the highest close since Nov. 19. Prices are down 12 percent this year.
Brent for January settlement slid 3 cents to $110.83 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $23.41 to New York- traded West Texas Intermediate grade. The spread widened for a third day yesterday to $23.48.
Israel and Hamas are seeking to solidify the cease-fire which took effect at 9 p.m. local time yesterday and was announced by Egyptian Foreign Minister Mohamed Amr and U.S. Secretary of State Hillary Clinton.
“Given the supply risks from the Middle East, I don’t really think prices will be going down further,” said Tetsu Emori, a chief fund manager at Astmax Investment Management Inc. in Tokyo who predicts Brent crude will trade at about $120 to $125 a barrel by the end of the year.
Israeli leaders have said that all options, including a military strike, are justified to counter Iran’s nuclear program, which they describe as an existential threat. Iran is the fifth-largest oil producer in the Organization of Petroleum Exporting Countries, data compiled by Bloomberg show.
Oil’s advance in New York may stall around $89.50 a barrel, along the top of a downward-sloping trend channel on the daily chart, according to data compiled by Bloomberg. Futures halted a rally this week in this channel, which goes back about two months. Sell orders tend to be clustered near technical- resistance levels.
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