Friday, August 31 09:40:28
Oil rose to $113 a barrel today, heading for a second monthly gain, supported by investor hopes of more monetary easing that could spur economic growth and support oil demand, and concern about supplies. Federal Reserve Chairman Ben Bernanke may acknowledge the U.S. central bank is actively considering another round of monetary easing in his Jackson Hole speech later on Friday. Brent crude was up 52 cents to $113.17 a barrel by 0816 GMT, after falling to a session low of $112.36 earlier. U.S. crude added 38 cents to $95.00.
"Oil is probably going to trade sideways today until the Bernanke speech, which will likely provide more of a downside risk as the markets have already priced in a policy easing response," said Natalie Rampono, commodity strategist at ANZ.
Even so, the Fed chief could disappoint markets if he stops short of signalling another bond-buying programme is imminent, an outcome which many analysts say is a strong possibility. Besides stimulus hopes, a looming drop in supply from the North Sea, source of the crude which underpins the Brent contract, due to oilfield maintenance as well as tension over Iran's nuclear programme also lent support.
A U.N. report said on Thursday Iran had doubled the number of uranium enrichment centrifuges it has in an underground bunker, showing Tehran has expanded its nuclear work despite Western pressure and the threat of an Israeli attack.
Other threats to supplies receded. The remnants of Hurricane Isaac, now downgraded to a tropical depression, were seen as posing no further threat to most oil and gas installations in the region. The Gulf of Mexico oil and gas industry has so far reported no major storm-related damage to infrastructure although one Louisiana refinery had flooding. Energy production was expected to start ramping up again.
Also easing concern about supply in the near term, a Reuters survey on Thursday found Iranian oil shipments rose slightly in August, contributing to an increase in OPEC output mainly driven by exports from Angola and Nigeria. ( C) Reuters