Oil Futures End Day Up

WASHINGTON (DTN) -- New York Mercantile Exchange oil futures nearest to delivery and Intercontinental Exchange Brent futures settled higher Friday after trading in narrow ranges, gaining on reports Iran seized another tanker.

Spot crude futures gains accelerated in aftermarket trade on reports the Iranian National Guard Corps seized a British flagged oil tanker in the Strait of Hormuz. British officials confirmed the vessel named Stena Impero was detained by Iran's armed forces while carrying crude oil from Saudi Arabia. The arrest of the tanker follows a White House report Thursday that a U.S. warship in the same waterway downed an Iranian unmanned drone, which Tehran continues to deny.

Markets were unnerved this week by a slew of violent incidents in the Middle East, which kept investors on their toes with a potential for an explosive upside. According to a Wall Street Journal report, the U.S. is currently conducting a large buildup of military forces in the region, including the USS Abraham Lincoln and USS Boxer and a fleet of 21 ships that patrol the critical waterway. U.S. officials said Thursday the Pentagon is sending 500 additional troops to Saudi Arabia as part of a buildup to counter potential threats from Iran. "We are ready and able to respond appropriately to threats to ensure a secure and safe maritime environment," said Gen. Matthew Trollinger.

Still, oil futures slid more than 5% across the board on the week, weighed down by fears of excess global supplies, weakening demand and decelerating manufacturing basis around the world. Oil futures started the week off lower as U.S. Gulf of Mexico operators began post-Hurricane Barry recovery efforts. Bearish refined products data and smaller-than-expected crude supply draws from the American Petroleum Institute and Energy Information Administration reports further weighed on prices. The latest EIA figures also showed lower domestic demand for gasoline. Higher stockpiles have led some market analysts to wonder whether the inventory buildup could also signal softening consumption. Earlier this month, both the International Energy Agency and the Organization of Petroleum Exporting Countries revised lower their demand forecasts.

NYMEX August West Texas Intermediate edged $0.33 higher to settle at $55.63 barrel (bbl) and ICE September Brent crude gained $0.54 to $62.47, while falling $4.25 or 6.4% from last Friday.

NYMEX August RBOB futures advanced 0.63cts to settle at $1.8405 gallon, near four-week low settlement. NYMEX August ULSD futures were up 2.71cts to a $1.8896 gallon settlement after shedding 4.6% on a week.

Liubov Georges can be reached at liubov.georges@dtn.com

(CZ)