Oil may increase next week as instability in the Middle East and North Africa bolsters concern that shipments from the region will be disrupted, a Bloomberg survey showed.
Eighteen of 43 analysts, or 42 percent, forecast crude will increase through Feb. 8. Sixteen respondents, or 37 percent, predicted a decline and nine forecast little change. Last week, 50 percent of analysts projected a gain.
An uprising in Syria has morphed into a civil war that’s claimed over 60,000 lives since 2011. Israeli jets hit Syrian trucks carrying anti-aircraft missiles for the Islamic militant group Hezbollah Jan. 29, according to a Western official who asked not to be named. A weeklong outbreak of street clashes in Egypt has left more than 50 dead, and French forces intervened in Mali on Jan. 11 when Islamic militants went on the offensive.
“Geopolitical tensions will be very much in focus in the Middle East and North Africa next week, as strife in Syria, Egypt and Mali continues to grow,” said John Kilduff, a partner at Again Capital LLC, a New York-based energy hedge fund.
Iran told United Nations monitors in a Jan. 29 letter that it’s installing new centrifuges at its Natanz facility that can enrich more uranium in less time, according to a restricted International Atomic Energy Agency document circulated to members. Enriched uranium is the heavy metal used to fuel nuclear reactors and form the core of atomic bombs.
The Middle East and North Africa accounted for about 40 percent of the world’s petroleum output last year, according to BP Plc’s Statistical Review of World Energy.
Oil increased $1.89, or 2 percent, to $97.77 a barrel this week on the New York Mercantile Exchange. It was crude’s eighth consecutive weekly rally. Prices climbed 6.2 percent in January.
Crude has only rallied for eight weeks twice before, periods ended in August 2004 and January 1990. A nine-week rally would be unprecedented since the contract began trading in 1983.
The oil survey has correctly predicted the direction of futures 50 percent of the time since its start in April 2004.
Bloomberg’s survey of oil analysts and traders, conducted each Thursday, asks for an assessment of whether crude oil futures are likely to rise, fall or remain neutral in the coming week. The results were: RISE NEUTRAL FALL 18 9 16