Oil rebounded in New York after dropping the most in more than three months as tensions between Syria and Turkey fanned concern that exports from the Middle East may be reduced.
Futures advanced as much as 0.9 percent as Turkey fired into Syrian territory for a second day and called for United Nations intervention. The euro gained against the dollar, boosting the appeal of commodities, as the European Central Bank left interest rates unchanged. Oil plunged 4.1 percent yesterday after the Energy Department reported that U.S. crude production climbed to the highest level in more than 15 years while fuel usage decreased.
“Turkey-Syria jitters are adding to general concerns in the Middle East,” said Andrey Kryuchenkov, an analyst at VTB Capital in London, who correctly predicted crude would fail to advance last month. “There’s some buying on the lows after losses yesterday, and the greenback is also a touch lower.”
Crude for November delivery gained as much as 80 cents to $88.94 a barrel on the New York Mercantile Exchange and was at $88.65 at 1:10 p.m. London time. Futures dropped to $88.14 yesterday, the lowest settlement since Aug. 2. Prices are down 10 percent this year.
Brent oil for November settlement advanced $1.16 to $109.33 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $20.57 to WTI, up from $20.03 yesterday.
Saudi Arabian Oil Minister Ali Al-Naimi, speaking at a conference in Ankara, Turkey, reiterated views that there is no difficulty with oil supply and additional demand can be met.
Oil prices were “very high” this year and the kingdom is working to keep them at a “reasonable level,” Al-Naimi said.
Lawmakers convened in Ankara for an emergency debate to grant Prime Minister Recep Tayyip Erdogan’s government a one-year mandate for possible military incursions into Syria. Turkish artillery units fired three salvos at Syrian military targets this morning, CNN-Turk reported.
Syria’s uprising has escalated into a conflict that’s spilling across its borders, with shells and gunfire now following tens of thousands of refugees into Turkey, Lebanon and Jordan.
U.S. crude output rose by 11,000 barrels a day to 6.52 million last week, the most since December 1996, the Energy Department reported yesterday. Fuel demand fell 0.3 percent to 18.3 million barrels a day in the four weeks ended Sept. 28, the lowest level since April.
The single European currency gained 0.4 percent to $1.2957 versus the dollar at 12:48 p.m. London time. The ECB, kept interest rates on hold at a meeting in Ljubljana, Slovenia, today.