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Oil hovers below $100 after US supplies soar

Oil hovers below $100 after US supplies soar

Oil prices hovered below $100 a barrel Thursday, with a report showing a jump last week in U.S. crude supplies countering concerns about Iran's threat to block a key Middle East oil shipping route.
By early afternoon in Europe, benchmark crude for February delivery rose 29 cents to $99.65 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.98 to settle at $99.36 in New York on Wednesday.
In London, Brent crude was up 8 cents at $107.64 a barrel on the ICE Futures exchange.
The American Petroleum Institute said late Wednesday that crude inventories rose 9.6 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted a drop of 2.3 barrels. The rise is a sign demand could be weakening.
Inventories of gasoline added 1.9 barrels last week while distillates grew 600,000 barrels, the API said.
The Energy Department's Energy Information Administration reports its weekly supply data _ the market benchmark _ later Thursday.
Investors are also closely watching developments in the Persian Gulf. On Tuesday, Iran's vice president said his country will close the Strait of Hormuz, and cut off crude exports, if Western nations impose sanctions on Iran's oil shipments.
On Wednesday, the U.S. Navy warned that any disruption of traffic in the strait, though which about a sixth of global production passes, would not be tolerated. A Saudi oil ministry official said his country and other Gulf producers are ready to provide more oil if Iran tries to block the strait.
"(Closing the Strait of Hormuz) would instantly draw all consuming nations into opposition with Tehran," energy consultant Cameron Hanover said in a report. "The U.S. and its Arab allies would be compelled to open it by military force."
"Under any scenario, that would be a game-changer."
Gains were limited by the stronger dollar, which usually weighs on crude by making the commodity more expensive for investors trading in other currencies. The euro was down to $1.2878 from $1.2941 late Wednesday in New York.
In other Nymex trading, heating oil rose 1.49 cents to $2.9161 per gallon and gasoline futures added 0.15 cent at $2.6471 per gallon. Natural gas futures were up 2.1 cents to $3.142 per 1,000 cubic feet.
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Alex Kennedy in Singapore contributed to this report.


Updated : 2021-03-03 14:25 GMT+08:00