August 20, 2008 / 7:44 PM / 10 years ago

NYMEX-Crude ends up on geopolitics, gasoline draw

* Traders react to Russia comments on shield deal

* Gasoline, heating oil recover from earlier dips

* TS Fay’s possible return to Gulf of Mexico watched

NEW YORK, Aug 20 (Reuters) - U.S. crude oil futures ended higher on Wednesday on geopolitical worries following news of Russia’s potential response to a the U.S.-Poland missile shield deal and news of a big drawdown in gasoline stocks.

The late reversal in prices overcame crude’s session losses of almost $3, which were fueled by government inventory data showing a larger-than-expected increase in crude supplies.

On the New York Mercantile Exchange, September crude CLU8 expired and settled up 45 cents, or 0.39 percent, at $114.98 a barrel, after trading from $112.61 to $117.03.

“The news of Russia’s potential response to the U.S.-Poland missile shield is causing crude to recover from earlier losses here,” said an off-floor NYMEX broker.

“The market is beginning to look at Russia more seriously here after discounting what it did to Georgia last week,” the broker added.

Technical resistance was charted at $120, above the $119.07 20-day moving average, with support remaining at $110.

In London, October Brent LCOV8 ended up $1.11, or 0.98 percent, at $114.36 a barrel, trading from $111.61 to $115.59.

Russia issued a harsh response on Wednesday to the announcement of a deal between Poland and the United States to base part of a U.S. missile defense system on Polish soil.

“Russia in this case will have to react and not only through diplomatic protests,” Russia’s Foreign Ministry said in a statement issued on its website [ID:nLK431570]

The Energy Information Administration said that for the week to Aug. 15, domestic crude stocks rose 9.4 million barrels to 305.9 million barrels, the biggest weekly increase since the week to March 23, 2001. [EIA/S]

A Reuters analyst poll forecast an 800,000-barrel build.

Crude imports rose 1.3 million barrels per day to 11 million barrels per day, due to the offloading of imports that were delayed the previous week by Tropical Storm Eduoard.

Gasoline stocks fell 6.2 million barrels to 196.6 million barrels, against the forecast for a 2.7-million-barrel drop.

NYMEX September RBOB RBU8 ended up 4.64 cents, or 1.62 percent, at $2.9103 a gallon, trading $2.82 to $2.9358. Resistance was charted at $2.99, support at $2.80.

September heating oil HOU8 finished up 3.98 cents, or 1.27 percent, at $3.1635 a gallon, trading from $3.08 to $3.1970. Resistance was at $3.29, support at $3.

The heating oil crack spread <0#CL-HO=R> ended up at $17.89, from Tuesday’s close at $16.67. The RBOB crack spread <0#RB-CL=R> shot up to $7.25, from Tuesday’s close at $5.75.

Goldman Sachs reiterated its year-end forecast of $149 a barrel for U.S. crude, saying strong fundamentals were a more important factor than a strengthening dollar.[ID:nLK184298]

The U.S. dollar rebounded, bolstered by growing view that the United States could skirt a possible recession. [USD/]

Russian military trucks crossed from Georgia back into Russia on Wednesday, but there was no sign of the large-scale, rapid pullout demanded by the West. [ID:nLK708802]

Energy traders were watching Tropical Storm Fay’s possible return to the Gulf of Mexico, where it could disrupt oil and natural gas production activities. [ID:nN20380028] (Reporting by Gene Ramos and Robert Gibbons; Editing by Christian Wiessner)

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