Oil Surges Ahead, War Anxiety Revisits the Market
NEW YORK (AP) _ Oil shot up more than $3 per barrel Wednesday, as war worries returned to the futures market in a rally that proved surprising even to traders who have grown accustomed to wild swings.
″It wasn’t one headline,″ said Ron Caples, a broker with Shearson Lehman Brothers Inc. ″It wasn’t one speech or one action or one rumor. The easiest way to describe it is the war premium is back, at least for today. I don’t want to go out on a limb and predict prices tomorrow.″
Contracts for November delivery of light sweet crude oil closed $3.37 higher at $37.32 per barrel on the New York Mercantile Exchange.
Later contract months all closed higher as oil made a substantial rebound from back-to-back dives Monday and Tuesday that totaled more than $5 a barrel.
Oil had opened slightly stronger Wednesday on an industry report showing the nation’s crude supply went down by 9.4 million barrels last week, as well as news that Secretary of State James A. Baker III said he had found growing international support for a military strike against Iraq.
But after several hours of lackluster trading, oil suddenly began surging ahead late in the afternoon, led by strong buying from the large trading houses. The reason for the jump seemed to elude professional traders.
The rally may have been helped by news that Iraqi President Saddam Hussein had gone to Kuwait, the oil-rich nation he conquered in August.
″A lot of people are feeling if he was down there, then maybe he was planning new strategies with his generals or whatever,″ said Thomas Blakeslee, an energy analyst with Pegasus Econometric Group Inc., in Hoboken, N.J.
Others said Saddam’s visit to the occupied territory could not fully explain the rally.
Home heating oil and unleaded gasoline contracts followed crude futures, as they have throughout the volatile week.
Heating oil rose 7.38 cents to 99.41 cents per gallon for November delivery, with later months all closing higher.
Unleaded gasoline went up 7.07 cents to 94 cents per gallon for November delivery, with most later months closing higher.
Natural gas contracts all traded higher, with November contracts rising 3.5 cents to $1.915 per 1,000 cubic feet.