Investors worry over supply while weak dollar boosts crude-oil prices
Oil futures moved up during European trading hours on Monday, because investors are concerned about possible supply restrictions due to never ending turmoil in the Middle East.
Crude-oil futures for November delivery increased by 62 cents, or 0.7%, from $90.67 a barrel, recovering from a $2.05 loss during the last trading session.
On Friday, a senior Lebanese intelligence official who was against the regime of Syrian President Bashar al-Assad was one of the victims (along with several other civilians) of a massive car bombing in Beiut.
After the temporary closure of a major pipeline in North America last week, supply worries were again an issue on Monday. The Keystone pipeline, which distributes about 500,000 barrels per day from Canada to the Midwest, was closed last Thursday. However, it was allegedly about to resume its work on Monday, which is a day later than expected.
Analysts at Commerzbank said that the unstable situation in the Middle East was still a factor which could drive prices upward. Lebanon has now turned into a new seat of unrest, as yesterday there were many violent disputes in the country.
The analysts also commented that the major risk factor for the oil price is further decline of general market sentiment along with growth in risk aversion.
Weaker dollar supported oil prices even further. The dollar index, which measures the greenback against a basket of six rival currencies, dropped to 79.557 from 79.629 in North American trade late Friday.
Dollar-denominated currencies usually increase on a weaker dollar due to the fact that they become cheaper for holders of other currencies.
Prices were mixed elsewhere in the energy complex. Heating oil for December supply increased by 0.3%, from $3.13 a gallon, while November gasoline hiked by 0.5% and reached $2.71 a gallon.
Natural gas for November supply fell by 0.2% to $3.61 per British thermal unit.
