Oil steady as Gaza fighting continues

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Associated Press

Posted on November 21, 2012 at 5:03 AM

BANGKOK (AP) — Diplomatic efforts to broker a cease-fire in Gaza intensified but no deal was announced Wednesday to halt the fighting between Israel and Islamic militant group Hamas. Oil prices regained some of the ground lost the day before.

Benchmark oil for January delivery rose 55 cents at late afternoon Bangkok time to $87.30 per barrel in electronic trading on the New York Mercantile Exchange. On Tuesday, the contract fell $2.53 to finish at $86.75 on signs that a deal between the two warring sides might be close.

U.S. Secretary of State Hillary Rodham Clinton was hastily dispatched to the region by President Barack Obama to join a group of world leaders working to halt the violence. She and other world diplomats shuttled among Jerusalem, the West Bank and Cairo, trying to piece together a truce that would satisfy the two foes after a week of fighting.

The possibility of a disruption in oil supplies when violence in the Middle East spikes often translates into higher crude prices. But the conflict in Gaza hasn't weighed heavily on prices so far since neither Israel nor the Palestinian territories are oil exporters.

Additionally, traders have said for weeks that inventories are ample, in part because of the global growth slowdown that has weakened demand for energy.

Analysts at CME Group say they expect this week's inventory data from the U.S. Energy Information Administration to show "another build in crude oil supplies in the range of 750,000 to 1.0 million barrels."

Brent crude, which is used to price international varieties of oil, rose 24 cents to $110.07 a barrel in London.

Other energy futures on the New York Mercantile Exchange:

— Heating oil rose 1.6 cents to $3.0647 a gallon.

— Wholesale gasoline rose 1.3 cents to $2.701 per gallon.

— Natural gas fell 2.4 cents to $3.808 per 1,000 cubic feet.

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