NEW YORK - Oil futures rose Monday after the government reported strong data on factory orders, giving investors some hope that the economy will dodge a recession that would curtail demand for energy.
The Commerce Department said factory orders jumped by 2.3 percent in December, more than analysts expected. Oil prices jumped on the news.
"(Factories are) an area that is very energy-intensive," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.
Despite Monday's gains, analysts caution that the oil market's overall tone remains negative. Friday's Labor Department report that employers cut payrolls by 17,000 jobs last month, the first reduction in more than four years, continues to weigh on investors minds, analysts said. That report pushed prices down by more than $2 on Friday.
Light, sweet crude for March delivery rose $1.06 to settle at $90.02 a barrel on the New York Mercantile Exchange.
A temporary closure of the Houston Shipping Channel and a ship channel near Port Arthur, Texas, both key waterways used to transport crude oil to Texas refineries, also pushed prices higher Monday.
"They shut down for fog again," Flynn said, referring to the Houston channel's closure several times in recent months due to the weather. Each closing tends to push prices higher as investors worry refineries won't have adequate access to crude.
Also supporting prices Monday was new violence in Northern Iraq and Nigeria. Turkish warplanes bombed 70 Kurdish rebel sites in Northern Iraq, while a Nigerian rebel group attacked security forces near a Royal Dutch Shell PLC oil-pumping station, killing three soldiers. Violence in both regions contributed to oil's rise to $100 a barrel earlier this year.
"Turkey and Nigeria, these are two areas persistently troubling for the oil markets," said Brad Samples, an analyst at Summit Energy Services Inc. in Louisville, Ky.
Investors worry that Kurdish rebels will purposely disrupt oil supplies from Iraq in retaliation for the Turkish attacks. Nigeria, meanwhile, is Africa's largest oil producer. About 587,000 barrels of daily crude production have been lost to unrest in Nigeria since the end of 2005, the Energy Department estimates.
At the pump, gas prices fell 0.2 cent overnight to a national average of $2.977 a gallon, and have slid 1.1 cents since Friday, according to AAA and the Oil Price Information Service. Gas prices, which typically lag the futures market, have retreated from levels above $3 a barrel since oil prices peaked and fell from $100 last month. However, the Energy Department predicts gas prices will rise later in the spring to new records near $3.50 a gallon. Prices are 80 cents higher than they were one year ago.
Other energy futures also rose Monday. March heating oil futures rose 3.44 cents to settle at $2.4833 a gallon while March gasoline futures rose 2.83 cents to settle at $2.3117 a gallon.
Natural gas futures rose 12.9 cents to settle at $7.869 per 1,000 cubic feet.
In London, Brent crude futures rose $1.03 to $90.47 a barrel on the ICE Futures exchange.
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