Oil prices rebound on jitters about supplies

October 9, 2012 - 8:34 AM

Oil prices appeared set for a modest rebound Tuesday after three days of losses, rising nearer to $90 a barrel on supply concerns due to the Syrian conflict and delays in shipments of North Sea oil.

By early afternoon in Europe, benchmark crude for November delivery was up 50 cents to $89.83 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 57 cents to $89.30 a barrel in New York on Tuesday.

In London, Brent crude, which is used to price international varieties of oil, rose 63 cents to $112.45.

"For the second time in the last three months oil markets received a jolt on concerns related to supply in the North Sea," said oil analyst Stephen Schork. "Supply fears have been getting priced into the market." He said the resumption of production from North Sea oil rigs that were undergoing maintenance has been slower than anticipated.

Traders have also been watching developments surrounding Syria for any signs of a disruption in supplies from the Middle East. There are fears that the violence in Syria could escalate into a wider regional conflict, threatening oil supplies.

"There are latent supply risks on the oil market since Turkey might become involved in the conflict in Syria, which would affect key oil transport routes," said a report from Commerzbank in Frankfurt. "Rebels in Sudan have attacked the provincial capital of the main oil producing region. This might endanger the recently signed peace treaty between Sudan and South Sudan and, in turn, the resumption of oil production, interrupted since the beginning of the year."

Worry about supplies seemed to overcome bearish news from the International Monetary Fund, which cut its global growth forecast saying that advanced economies are at risk of recession and that the world economy will expand 3.3 percent this year, down from the estimate of 3.5 percent growth it issued in July.

In other futures traded in New York:

— Natural gas lost 0.9 cent to $3.394 per 1,000 cubic feet.

— Heating oil added 1.65 cents to $3.1608 per gallon.

— Wholesale gasoline was up 2.94 cents to $2.9225 per gallon.

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Pamela Sampson in Bangkok contributed to this report.