Futures Movers
March 23, 2011, 10:19 a.m. EDT
Crude futures top $105 a barrel
Traders monitor the ongoing conflict in oil-rich Libya
By V. Phani Kumar and Simon Kennedy, MarketWatch
SAN FRANCISCO (MarketWatch) â Crude-oil futures surpassed $105 a barrel Wednesday, extending the previous sessionâs strong gains, as fighting in Libya and increasingly violent antigovernment protests in the Middle East kept the risk of supply shocks on the front burner.
Crude for May delivery (NEW:CLK11) , the new front-month contract, rose 59 cents, or 0.6%, to $105.56 a barrel on the New York Mercantile Exchange.
On Tuesday, May futures closed up 1.8%, or $1.88, at $104.97 a barrel in the regular trading session in New York, while the prior front-month April contract closed at $104 a barrel.
Libya air strikes expected to slow
The advance came as coalition forces continued their air attacks on troops loyal to Libyan leader Col. Moammar Gadhafi.
Days after the launch of airstrikes to enforce a no-fly zone as part of an international effort to protect Libyan civilians engaged in a struggle to oust Gadhafi, there was little evidence that the attacks had stopped the bloodshed or shifted the balance of power in favor of the rebels, according to a Washington Post report.
Gadhafi appeared on Libyan television for the first time in about a week to rally supporters and pledge victory.
Fears remained about the North African countryâs oil production, despite assurances from Saudi Arabia that it would meet any supply shortfall resulting from Libyaâs turmoil.
âEvents this week in Libya make it increasingly unlikely that weâll see a swift normalization of Libyan crude-oil production in the near term,â said Deutsche Bank analyst Soozhana Choi in a note to clients.
âMarkets are increasingly bracing themselves for a lengthy disruption to Libyan crude-oil exports that may last potentially many months, if not more than a year,â Choi added.
Unrest in Yemen and Syria added to geopolitical worries. In Syria Wednesday, as many as six people were killed in antigovernment protests, the Associated Press reported, citing an activist. In Yemen, a producer of crude oil and liquified natural gas, the parliament approved a state of emergency after massive protests in the country.
And a large explosion was heard in Jerusalem Wednesday; witnesses said a bus exploded.
âWe still believe that crude oil is somewhat overextended here, as despite the ongoing tensions in the Middle East, there has not been any meaningful disruption in supply other than from Libya,â wrote Edward Meir, commodities analyst at MF Global.
But, he added, âinvestor jitters are somewhat justified given the fast-paced geopolitical developments sweeping various countries.â
April natural-gas futures (NEW:NGJ11) rose 3 cents to $4.28 per million British thermal units.
Gasoline for April delivery (NEW:NGJ11) edged up less than a penny to $3.01 a gallon.
Late Tuesday, the American Petroleum Institute reported that gasoline stocks for the week ended March 18 tumbled 7.9 million barrels, much more than a drop of 2 million barrels expected by analysts surveyed by Platts.
At 10:30 a.m. Eastern, the Energy Information Administration will report its estimates of weekly petroleum inventories.
Analysts are expecting a rise in crude-oil stockpiles of 2 million barrels and a 1.5 million-barrel decline in distillate stocks.
