Oil prices rose in Asia Thursday as futures were whipped around by inventory outlooks and worries over a possible attack by Turkey on Kurdish rebels in northern Iraq, the Associated Press reported. Light, sweet crude for November delivery rose 40 cents to US$87.80 a barrel in Asian electronic trading on the New York Mercantile Exchange by late afternoon in Singapore. The Nymex crude contract lost 21 cents to settle at US$87.40 a barrel Wednesday in the U.S. after trading at a record US$89 a barrel. On Wednesday, though, unexpectedly large gains in U.S. crude oil and gasoline inventories won the day over news that Turkey's parliament approved a government plan to attack Kurdish rebels in northern Iraq. The U.S. Energy Department's weekly inventory report also countered previous perceptions that oil supplies are falling and demand is growing, analysts said. Many argue that speculative investing is the real culprit behind oil's rally over the last week. The Energy Information Administration reported that crude inventories rose 1.8 million barrels during the week ended Oct. 12, more than the 1 million barrel increase analysts surveyed by Dow Jones Newswires had expected on average. The EIA also said gasoline supplies rose 2.8 million barrels last week, nearly triple analyst expectations for a 1 million barrel increase. Distillates, which include heating oil and diesel fuel, rose 1 million barrels last week, the EIA said, while analysts had predicted a fall of 400,000 barrels. December Brent crude rose 4 cents to US$83.17 a barrel on the ICE futures exchange in London. Nymex heating oil futures rose 1.05 cent to US$2.3294 a gallon (3.8 liters) while gasoline prices added 0.48 cent to US$2.1514 a gallon. November natural gas futures fell 6.2 cents to US$7.396 per 1,000 cubic feet. The EIA also reported that U.S. refinery activity fell last week by 0.5 percentage point to 87.3 percent of capacity. Analysts had expected refinery utilization to grow by 0.4 percentage point.
