Brent crude swung between gains and losses after rising for the first time in three days yesterday as U.S. lawmakers urged backing for military action
Economic data did not have much effect on the energy commodities as traders tensions eased as the US backed off immediate plans to attack Syria. President Obama over the weekend decided to seek congressional approval for any intervention. Congress is on holiday until September 9th. Meanwhile, markets await the Energy Information Administration’s oil inventory report due later this week for further cues. The market’s mood turned more bullish throughout the day, with traders buoyed by improved factory activity in China and the euro zone, news of delays to benchmark North Sea Forties oil production and a French intelligence report that may bolster the case for military action to punish Syrian President Bashar al-Assad for a reported chemical weapons attack on Aug. 21.
Brent oil rebounded from a $2 drop early in the day to rise 35 cents or 0.3 percent to settle at $114.36 a barrel. WTI crude oil fell 83 cents to trade last at $106.82 per barrel at 1pm EST, the end of a thinly traded, holiday-shortened day. It had dropped as low as $104.21.
US markets were closed on Monday for the Labor Day holiday, which left volume down as the NYMEX was shuttered for the day. News was light as European traders returned from summer vacation. From today’s point of view, it seems that the situation hasn’t changed much, because light crude is trading between $105 and $107 per barrel – just like it did a week ago. However, last week was very interesting and brought a significant improvement in the oil market – a positive change which, eventually, turned out to be only temporary. The crude market is always sensitive to Middle East conflict. As you remember, prices rose to $115 on the unrest in Libya two years ago and to $110 on Iran’s nuclear program.
Natural gas climbed to 3.67 adding 5 pips on light trading volume as traders watch the temperature gauge in the US hoping higher temperatures will increase residential demand as summer draws to a close.