17 August 2013, News Wires – Oil futures on both sides of the Atlantic ended higher for the sixth straight session on Friday, with Brent oil posting the biggest weekly percentage gain in six weeks as turmoil in Egypt and Libya stoked worries about oil supply security.
Brent crude staged a late-session comeback after trading lower earlier in the afternoon in New York. Trading was very choppy as traders sold contracts ahead of the weekend to book profits, brokers said.
Brent crude futures for October delivery finished the day 80 cents higher at $110.40 a barrel. Brent gained 2% on the week, its largest weekly percentage gain since the week to 5 July, according to Reuters data.
On Thursday, the September contract expired 91 cents higher at $111.11 per barrel.
Civil unrest in Egypt and Libya supported prices, analysts said. Although Egypt is not a major oil producer, investors are wary that the unrest there could spread through the Middle East, which pumps more than a third of the world’s oil.
The Suez Canal and Egyptian ports were operating normally, shipping sources told Reuters on Thursday but concerns remained over whether the Suez, a major oil conduit, would be affected by the Egyptian unrest.
Thousands of supporters of ousted President Mohamed Mursi took to Egyptian streets on Friday, urging a “Day of Rage” to denounce this week’s assault by security forces on Muslim Brotherhood protesters that killed hundreds.
At least 50 people were killed on Friday just in the Egyptian capital, Cairo.
Additionally, Libya’s oil production and exports have been crippled by violence and strikes, pushing exports to their lowest level since the civil war of 2011. One refinery has reinstated some exports.
A bomb attack halted crude oil flow through the Iraq-Turkey pipeline on Friday, and repair work could take 48 hours.
In the US, oil futures ended slightly higher but pared most of their early gains as traders brushed off the threat of supply disruptions from tropical storms in the Gulf of Mexico.
US crude oil futures for September delivery settled 13 cents higher at $107.46, after trading as high as $108.17. US oil futures ended 1.4% higher on the week.
The September crude oil contract expires on Tuesday and volumes were heavier in the October contract. US crude oil futures for October delivery settled 10 cents higher at $107.29.
The spread between October and November US oil futures narrowed late in the session to 78 cents, the smallest point between the two contracts in six weeks.
Some brokers said traders unwound the spread as fears of a continued drawdown of supplies at Cushing, Oklahoma, abated and as the September contract was set to expire.
US economic data and stock market performance were “at best secondary, if not tertiary, drivers”, relative to what was happening in Egypt, Stephen Schork, editor of The Schork Report in Villanova, Pennsylvania, told Reuters.
US stock markets fell on Friday, following the largest one-day drop in almost two months a day earlier.
“The fact that WTI is moving higher and the stock market is getting beat up is just confirmation that this is a risk premium being priced in,” Schork said.
Money managers cut their net long US crude futures and options positions in the week to 13 August, the US Commodity Futures Trading Commission said on Friday.
Gulf of Mexico oil producers were monitoring the weather, but the US market largely brushed off concerns of supply disruptions.
Still, several oil companies have shuttled some offshore personnel on to land as a broad low pressure system in the south-western Gulf of Mexico threatened to form a more organised storm system in the next two days.
Brazil’s state-run oil company, Petrobras, had shut in some production. Gulf of Mexico oil production accounts for 23% of total US crude oil production, according to US government data.