Oil Snaps Out Of Funk On Iran Threats

Published on Tuesday, 07 February 2012 17:30 Written by Todd Shriber

New York, February 7^th (TradersHuddle.com) – Once again it was OPEC member Iran threatening to cut off crude supplies to the European Union that situation along with further speculation Greece is edging closer to a debt deal helped spark a volatile trading session that saw oil finish higher. NYMEX-traded crude climbed $1.57 to settle at $98.48 a barrel while Brent crude gained 82 cents to close at $116.75 a barrel. Earlier in Tuesday’s session, the spread between the two contracts reached $20 a barrel before trending lower. That was the widest spread since October 2011, according to Reuters.

Volume was heavy, especially for the U.S. contract. U.S. turnover exceeded 900,000 lots and was 60 percent above the 30-day average, while Brent turnover was 20 percent above its 30-day average, Reuters noted. That scenario played out in the U.S. Brent Oil Fund (NYSE: BNO), which ended the day with a small loss on volume that was nearly double the daily average. The PowerShares DB Dollar Bullish (NYSE: UUP) fell almost 0.7% on above average turnover, helping aid oil’s up move on the day.

Also lending a hand to bullishness in the oil pits today was the U.S. Energy Information Administration. EIA raised its global demand forecast for the first time in three months, saying supplies could fall a bit as non-OPEC production fails to excite. The agency said global demand for oil would rise by 1.32 million barrels per day this year, 50,000 barrels per day higher than its original estimate. For 2013, the EIA sees demand rising by 1.49 million barrels per day, 20,000 barrels above the previous esimate.

Looking at oil equities, Anadarko Petroluem (NYSE: APC) surged 5.2% to a new 52-week high on volume that was better than double the daily average. The largest U.S. independent oil and gas producer reported fourth-quarter earnings Monday after the close and investors apparently liked what they word. Anadarko broke through critical resistance at $85 the chart indicates this stock has running to the high $90s are even $100.

BP (NYSE: BP), Europe’s second-largest oil company, fell after its earnings report, but the news was more good than bad and that’s always something to note with this controversial company. BP raised its dividend to eight cents a share from seven cents and CEO Bob Dudley said that by 2014, as long as oil keeps hovering around $100 per barrel, BP could boost operating cash flow by 50%. BP’s year-over-year production fell 5%, but increased 5% on a sequential basis.

Among the U.S. oil majors, Exxon Mobil (NYSE: XOM), Chevron (NYSE: CVX) and ConocoPhillips (NYSE: COP) all closed higher on the day with Conoco leading the way with a gain of 0.84%.