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Oil near $92 in Asia as market weighs weak demand picture against rising Middle East tensions
BANGKOK (AP) Oil edged down to near $92 a barrel Friday in Asia, after a big jump the day before, as a weak demand picture was weighed against rising Middle East tensions.
Benchmark crude was down 56 cents at $92.10 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract surged $2.79, about 3 percent, to settle at $92.66 in New York on Thursday, its highest level since mid-May.
Brent crude was down 47 cents at $107.33 on the ICE futures exchange in London.
The oil market is responding to a series of events that have raised concerns that Iran will try to block oil shipments through the Strait of Hormuz, a narrow waterway in the Persian Gulf through which one-fifth of the world's oil travels every day. The U.S. and Europe have applied sanctions against Iranian oil exports as they try to wring concessions from Tehran over a nuclear energy program they believe is a cover for eventually producing nuclear weapons.
In the past few weeks negotiations with Iran over its nuclear program appeared to have failed, a U.S. Navy ship fired on a boat in the Persian Gulf and Iran said it has devised a specific plan to block oil shipments. Then, on Wednesday, seven Israelis were killed in a suicide attack in Bulgaria. Israel blamed Iran for the attack, and vowed to strike back. Iran has denied involvement.
Analysts say Middle East tensions could cause further spikes higher for oil but they might not be long lasting. The world's two biggest crude consumers the U.S. and China are both grappling with economic slowdowns that are crimping demand for oil. Supplies, meanwhile, are plentiful.
In other energy trading, natural gas was down 0.1 cent at $2.998 per thousand cubic feet. Heating oil was off 0.9 cent at $2.938 a gallon and gasoline fell 1.1 cents to $2.83 a gallon.