NEW YORK (Reuters) - Oil prices rose a third straight day on Thursday on hints of a third round of monetary stimulus from the U.S. Federal Reserve and persistent worries that tensions in the Middle East could disrupt crude supplies.
Investor hopes for more Fed stimulus were reinforced when minutes from the latest policy meeting, released on Wednesday, suggested the central bank would be likely to act, "fairly soon" unless the economy improves considerably.
Oil pared gains initially on data showing a rise in U.S. jobless claims last week, against expectations for a slight decline, but analysts and traders noted that while unemployed people buy less fuel, weak data pressures central banks to act.
The possibility of more stimulus, viewed as potentially inflationary, lifted the euro and weighed on the dollar, lending support for dollar-denominated oil prices.
"There is no good data, but the poor data has equated to more hopes for stimulus," said Addison Armstrong, senior director for market research at Tradition Energy in Stamford, Connecticut.
"The struggle for U.S. crude today will be to settle again over the 200-day moving average, $96.75." Brent October crude rose $1.21 to $116.12 a barrel at 11:53 a.m. EDT (1553 GMT), having reached $116.38.
An upcoming maintenance-related slide in North Sea oil production and heightened Middle East tensions helped Brent hit a three-month peak at $117.03 a week ago as its September contract headed to expiration and went off the board at $116.90 a barrel, the highest settlement since May 2.
Brent has recovered from a low of $88.49 posted on June 22 after retreating from the 2012 peak at $128.40 hit on March 1. U.S. October crude was up 43 cents at $97.69 a barrel, after reaching $98.29, highest since early May.
The stimulus hopes outweighed disappointing data from China, which signaled that the slowdown in the world's biggest energy consumer and No. 2 oil consumer had extended into the third quarter.
The HSBC Flash China manufacturing purchasing managers index (PMI) fell to 47.8 in August, its lowest level since November, down from the 49.5 July flash and the 49.3 final reading.
A flare up of tropical storms in the Atlantic and their potential threat to the U.S. oil infrastructure in the Gulf of Mexico added support for oil prices. Tropical Storm Joyce formed on Thursday in the eastern tropical Atlantic, the U.S. National Hurricane Center said.
Tropical Storm Isaac weakened slightly near Puerto Rico and the Virgin Islands on Thursday but it was expected to strengthen into a hurricane before moving across the Dominican Republic and Haiti, U.S. forecasters said.
MIDDLE EAST TURMOIL
The violent struggle in Syria and tensions over the dispute over Iran's nuclear program continued to raise the specter of potential supply disruptions in the region.
The U.S. Navy is cutting short home leave for the crew of one of its aircraft carriers, the USS Stennis, and sending them back to the Middle East next week to counter any threat from Iran, according to the official Navy News Service.
The chief of the U.N.'s International Atomic Energy Agency on Wednesday played down the chances of a breakthrough when talks with Iran resume on Friday, but said the agency would pursue access to the Parchin military site that diplomats say may have been cleansed of evidence of illicit nuclear activity.
yahoo.com
Investor hopes for more Fed stimulus were reinforced when minutes from the latest policy meeting, released on Wednesday, suggested the central bank would be likely to act, "fairly soon" unless the economy improves considerably.
Oil pared gains initially on data showing a rise in U.S. jobless claims last week, against expectations for a slight decline, but analysts and traders noted that while unemployed people buy less fuel, weak data pressures central banks to act.
The possibility of more stimulus, viewed as potentially inflationary, lifted the euro and weighed on the dollar, lending support for dollar-denominated oil prices.
"There is no good data, but the poor data has equated to more hopes for stimulus," said Addison Armstrong, senior director for market research at Tradition Energy in Stamford, Connecticut.
"The struggle for U.S. crude today will be to settle again over the 200-day moving average, $96.75." Brent October crude rose $1.21 to $116.12 a barrel at 11:53 a.m. EDT (1553 GMT), having reached $116.38.
An upcoming maintenance-related slide in North Sea oil production and heightened Middle East tensions helped Brent hit a three-month peak at $117.03 a week ago as its September contract headed to expiration and went off the board at $116.90 a barrel, the highest settlement since May 2.
Brent has recovered from a low of $88.49 posted on June 22 after retreating from the 2012 peak at $128.40 hit on March 1. U.S. October crude was up 43 cents at $97.69 a barrel, after reaching $98.29, highest since early May.
The stimulus hopes outweighed disappointing data from China, which signaled that the slowdown in the world's biggest energy consumer and No. 2 oil consumer had extended into the third quarter.
The HSBC Flash China manufacturing purchasing managers index (PMI) fell to 47.8 in August, its lowest level since November, down from the 49.5 July flash and the 49.3 final reading.
A flare up of tropical storms in the Atlantic and their potential threat to the U.S. oil infrastructure in the Gulf of Mexico added support for oil prices. Tropical Storm Joyce formed on Thursday in the eastern tropical Atlantic, the U.S. National Hurricane Center said.
Tropical Storm Isaac weakened slightly near Puerto Rico and the Virgin Islands on Thursday but it was expected to strengthen into a hurricane before moving across the Dominican Republic and Haiti, U.S. forecasters said.
MIDDLE EAST TURMOIL
The violent struggle in Syria and tensions over the dispute over Iran's nuclear program continued to raise the specter of potential supply disruptions in the region.
The U.S. Navy is cutting short home leave for the crew of one of its aircraft carriers, the USS Stennis, and sending them back to the Middle East next week to counter any threat from Iran, according to the official Navy News Service.
The chief of the U.N.'s International Atomic Energy Agency on Wednesday played down the chances of a breakthrough when talks with Iran resume on Friday, but said the agency would pursue access to the Parchin military site that diplomats say may have been cleansed of evidence of illicit nuclear activity.
yahoo.com
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