NEW YORK, (AP) – Oil prices rose Thursday after the assassination of Pakistani opposition leader Benazir Bhutto raised concerns about stability in the Middle East.
Bhutto died in a suicide attack that also killed at least 20 others at a campaign rally, aides said.
“It’s definitely instability,” said James Cordier, president of Liberty Trading Group in Tampa, Fla. “Everybody wants calm when they’re talking about pricing energy (futures).”
Light, sweet crude for February delivery rose 34 cents to $96.31 a barrel on the New York Mercantile Exchange.
Also supporting oil prices Thursday were expectations that domestic crude supplies fell last week. In its weekly inventory report, the Energy Department’s Energy Information Administration is expected to show that oil supplies fell by 1.3 million barrels last week, according to the average forecast of analysts surveyed by Dow Jones Newswires.
Analysts believe crude supplies fell because of foggy weather that at times prevented oil tankers from entering the Houston Ship Channel and delivering their cargoes.
The EIA report is also expected to show that distillate inventories, which include heating oil and diesel fuel, fell by 800,000 barrels, while gasoline stockpiles rose by 1.4 million barrels. Refinery use likely grew by 0.6 percentage point to 88.4 percent of capacity, analysts predict.
At the pump, meanwhile, gas prices rose 0.8 cent overnight to a national average of $2.981 a gallon, according to AAA and the Oil Price Information Service. Gas prices are on the rebound after falling nearly 14 cents a gallon since mid-November. Pump prices, which typically lag the futures market, rose when oil was approaching $100 a barrel, only to fall when oil retreated by more than $10 from its Nov. 21 peak of $99.29.
But oil prices have risen 5 percent in a week on concerns about supplies, stoked by a large unexpected decline in crude inventories last week and attacks by Turkish forces on Kurdish rebel positions in northern Iraq. Analysts say low holiday volumes are contributing to the gains.
“Often times light trading volumes exaggerate price swings,” said Addison Armstrong, director of exchange traded markets at TFS Energy Futures LLC in Stamford, Conn.
Other energy futures were mixed Thursday. Heating oil futures rose 1.61 cents to $2.6573 a gallon while gasoline futures rose 1.19 cents to $2.4645 a gallon. Natural gas futures fell 17.6 cents to $6.87 per 1,000 cubic feet.
In London, February Brent crude futures rose 41 cents to $94.35 a barrel on the ICE Futures exchange.