Oil, Natural Gas Advance on Storm Fears

Crude futures advanced Wednesday on news of a cyclone bearing down on a major Middle Eastern shipping port and other geopolitical concerns, while ignoring bearish inventory figures.

After piercing the $66 barrier, the July crude contract settled 37 cents above its previous close at $65.98 a barrel. Reformulated gasoline slid 2 cents to $2.19 a gallon. Heating oil gained a penny to finish at $1.97 a gallon.

Natural gas advanced 5 cents to $8.11 per million British thermal units.

Cyclone Gonu reached Oman Tuesday and has affected oil shipments to a small degree. However, the cyclone has weakened significantly since it first arrived in the Gulf of Oman, allowing oil tankers to sail through the Straight of Hormuz and navigate around the storm, according to Dennis Gartman, publisher of The Gartman Letter.

Although traders are waiting to receive the final report on possible infrastructure damage or supply disruptions, it is unlikely that the cyclone had any major impact, according to analysts at Barclay's Research.

Energy markets were also shaken Wednesday by rumors that Turkey sent troops across the Iraqi border to chase Kurdish guerillas. Neither Turkey nor the U.S. Department of Defense were able to confirm the report, and by Wednesday afternoon the rumors were being largely ignored by oil traders.