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Crude Futures Erase Weekly Gain as Mideast Tension Eases

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Nov. 23 (Bloomberg) -- Crude dropped in New York, erasing a weekly advance, after a truce between Israel and Hamas held for a second day, easing concern that the conflict would disrupt supplies from producers in the Middle East.

West Texas Intermediate declined as much as 0.8 percent after a Egypt-U.S.-crafted cease-fire halted eight days of aerial assaults that killed at least 167 Palestinians and six Israelis. Crude may decline next week following the cessation of hostilities, according to a Bloomberg survey. There was no U.S. floor trading yesterday because of the Thanksgiving holiday.

“Crude will probably close down on the day as there are no new catalysts and the apparent calming of the situation in Gaza,” Michael Hewson, a London-based market analyst at CMC Markets Plc, said by phone today. “It’s a good day to grab a cup of coffee and kick the feet up.”

Futures for January delivery dropped as much as 67 cents to $86.71 a barrel in electronic trading on the New York Mercantile Exchange. That’s within 4 cents of last week’s close. Futures were down 7 cents to $87.31 at 1:15 p.m. London time. Yesterday’s electronic transactions will be booked with today’s trades for settlement purposes.

Brent for January settlement rose 9 cents to $110.64 a barrel on the London-based ICE Futures Europe exchange and is heading for a weekly gain of 1.6 percent. The European benchmark crude was at a premium of $23.33 to New York-traded WTI grade.

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.

Futures in New York may decline next week, according to the Bloomberg survey. Twelve of 27 analysts and traders, or 44 percent, forecast prices will decrease through Nov. 30. Nine respondents, or 33 percent, predicted a gain. Six forecast little change.

To contact the reporter on this story: Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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