London: Brent crude oil headed for its highest close in a month on Thursday, lifted by escalating tension between Syria and Turkey, maintenance in the North Sea and a supply crunch in oil products.
November Brent crude rose 87 cents to $115.20 a barrel by 1045 GMT, after jumping by $1 earlier in the session. The contract reached $115.59 on Wednesday, its highest level since September 17.
US crude rose 78 cents to $92.03 after dropping more than 1 percent in the previous session. A larger-than-expected rise in US crude inventories weighed on prices.
Turkey scrambled fighters and briefly detained a Syrian passenger plane on Wednesday, suspecting it of carrying military equipment from Moscow, while Turkey’s military chief warned of a more forceful response if shelling continued to spill over the border.
“The Syrian situation is heating up and there are fears about Turkey, a member of the North Atlantic Treaty Organisation (Nato), retaliating and contagion in the region,” said Bjarne Schieldrop, analyst at SEB in Oslo.
Worries about supply disruption caused by fears of violence in the Middle East and maintenance at the North Sea Forties oil field has pushed Brent’s premium to US crude to its highest in a year at around $23.50.
Firmer refining margins and steep backwardation in the gasoil market, where prices are higher for prompt delivery than for later dates, pointed to firm demand going into the northern hemisphere winter.
“At current prices, the upcoming winter will be the most expensive winter ever for the consumers using heating oil,” said Olivier Jakob at Petromatrix in Switzerland, adding that gasoline prices were also high.
“All in all, after the high cost of driving and heating there will be at least one iPad less under the Christmas tree,” he said.
Forecasts of slower economic and fuel demand growth in the world kept oil prices from rising further.
Global oil demand is looking weaker than previously forecast as the slowing economy continues to weigh on consumption, the US government and the Organization of the Petroleum Exporting Countries said in reports.
The US Energy Information Administration (EIA) and the Organisation of Petroleum Exporting Countries (Opec) on Wednesday cut their forecasts for growth in world oil demand in 2013, a day after the International Monetary Fund lowered its economic growth forecasts for the second time since April.
China’s annual economic growth probably slowed for a seventh straight quarter in the July-September period to the weakest level since the depths of the global financial crisis, a Reuters poll showed.
The EIA and OPEC reports are two of three major oil outlooks due out this week, with the International Energy Agency to release its October oil markets outlook on Friday.
In the United States, crude stocks rose 1.6 million barrels last week, the industry group American Petroleum Institute said on Wednesday, more than an 800,000-barrel build forecast by analysts in a Reuters poll.
The EIA will release its weekly inventory report later on Thursday. A poll of 12 analysts’ forecast weekly US stockpiles data would show crude inventories up 800,000 barrels for week ended October 5.
