Oil headed for a third weekly gain in New York after fighting in Gaza renewed concern about the threat to Middle East supplies and U.S. crude stockpiles unexpectedly dropped.
West Texas Intermediate futures were little changed compared with the close on Nov. 21, taking the week’s gain to 0.4 percent. There was no settlement yesterday because floor trading was closed for the Thanksgiving holiday. A cease-fire crafted by Egypt and the U.S. halted eight days of aerial assaults that ravaged the Gaza Strip and made Tel Aviv a missile target. Oil inventories shrank 1.47 million barrels last week, according to the Energy Department. The median estimate in Bloomberg survey of analysts was a gain of 1 million.
Crude for January delivery traded at $87.10 a barrel, down 28 cents, or 0.3 percent, in electronic trading on the New York Mercantile Exchange at 7:32 a.m. in Singapore. The contract climbed 63 cents Nov. 21 to $87.38. Prices are down 12 percent this year.
Brent for January settlement slid 31 cents to settle at $110.55 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark crude closed at a premium of $23.17 to New York-traded WTI.
Hamas and Israel are seeking to solidify the cease-fire which took effect at 9 p.m. local time Nov. 21 and was announced by Egyptian Foreign Minister Mohamed Amr and U.S. Secretary of State Hillary Clinton.
The conflict in Gaza threatens further instability in the Middle East and North Africa after a wave of uprisings that started last year, including one that almost entirely halted crude exports from Libya. Israeli leaders have said that all options, including a military strike, are justified to counter Iran’s nuclear program, which they describe as an existential threat. Iran is the fifth-largest oil producer in the Organization of Petroleum Exporting Countries, data compiled by Bloomberg show.