BLBG: Oil Rises to 6-Month High on Forecasts That U.S. Supplies Fell
Oil rose above $61 a barrel for the first time in six months before a government report that’s forecast to show U.S. crude supplies dropped for a second week.
Stockpiles fell 400,000 barrels in the week ended May 15 from 370.6 million the previous week, according to a Bloomberg News survey conducted before today’s Energy Department report. Yesterday, the industry-funded American Petroleum Institute reported a decline of 4.47 million barrels for the period.
“The API report last night got things going,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York.
Crude oil for July delivery rose 96 cents, or 1.6 percent, to $61.06 a barrel at 9:02 a.m. on the New York Mercantile Exchange. Futures touched $61.15, the highest price for the contract closest to expiration since Nov. 11. Oil is up 37 percent this year.
Inventories may fall as oil imports to the U.S., the world’s biggest crude user, decline. Supplies brought into the country fell 12 percent to 8.71 million barrels a day in the week ended May 8, the lowest since September, the Energy Department said on May 13.
Gasoline stockpiles dropped 1.2 million barrels last week, according to the median of responses from fifteen analysts in the Bloomberg News survey.
The Energy Department is scheduled to release its weekly report on supplies at 10:30 a.m. in Washington.
Refinery Fire
Prices also rose because of disruptions at U.S. refineries. The catalytic cracker was shut after a fire yesterday at Flint Hills Resources LLC’s Corpus Christi plant, according to the Texas Commission for Environmental Quality. A catalytic cracker is used to make products such as gasoline and diesel.
Gasoline for June delivery climbed 3.55 cents, or 2 percent, to $1.848 a gallon in New York. Futures touched $1.853, the highest since Oct. 15.
Sunoco Inc. shut a gasoline-making unit at its Marcus Hook, Pennsylvania, plant following a fire on May 17. Valero Energy Corp’s Delaware City, Delaware, plant released sulfur dioxide from its fluid catalytic cracking unit on May 18, according to a filing with Delaware state regulators.
The Energy Department report will probably show U.S. refineries operated at 84.2 percent of capacity last week, up 0.5 percentage point from the previous week, according to the median of responses in the survey. Refinery operations usually climb for the peak gasoline-consumption period, which lasts from the Memorial Day weekend in late May to Labor Day in September.
The Organization of Petroleum Exporting Countries is unlikely to reduce output further when it meets on May 28, a member of Kuwait’s Supreme Petroleum Council was cited as saying by state-owned KUNA news agency today. OPEC is still implementing a series of supply cuts announced last year.
Brent crude for July settlement rose 81 cents, or 1.4 percent, to $59.73 a barrel on London’s ICE Futures Europe exchange.
