BLBG: Oil Little Changed as Rising Equities Temper Supply Concerns
By Grant Smith
March 23 (Bloomberg) -- Crude oil traded little changed, paring earlier losses, as rising equity markets tempered concern that U.S. demand has yet to recover.
The U.S. Energy Department will probably report tomorrow that crude stockpiles rose 1.43 million barrels, increasing for an eighth week, according to a Bloomberg News survey. That would be the longest period of advances since May.
“The market is now trying to establish a range with $80 as its floor,” said Tobias Merath, head of commodity research at Credit Suisse Group AG. “Global market balances are slowly tightening but still we have high spare capacity and high inventories so the market could be range-bound for quite some time.”
Crude oil for May delivery was unchanged at $81.60 a barrel in electronic trading on the New York Mercantile Exchange as of 10:26 a.m. London time. It earlier fell 0.6 percent to $81.14. Brent crude for May settlement was up 2 cents at $80.56 on the ICE Futures Europe exchange in London.
European equities climbed to an 18-month high, extending gains after Bank of China Ltd. reported earnings that beat analysts’ estimates. The Stoxx Europe 600 Index gained 0.6 percent to 261.71 at 10:26 a.m. in London.
The Energy Department is scheduled to release its weekly report at 10:30 a.m. in Washington tomorrow. Gasoline inventories probably declined 1.75 million barrels from 227.3 million the previous week, according to the median of 10 estimates before an Energy Department report.
Distillate Stockpiles
Stockpiles of distillate fuel, a category that includes heating oil and diesel, fell 1.33 million barrels from 148.1 million the prior week. Nine of the respondents forecast a decline and one expected a gain.
“I don’t see with the fundamentals that oil prices should be squeezed dramatically higher,” said David Moore, commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney.
The Organization of Petroleum Exporting Countries has spare production capacity of more than 6 million barrels a day, Germanico Pinto, OPEC’s president and Ecuador’s oil minister, said at a conference yesterday in Geneva. That’s a “comfortable cushion of spare capacity,” he said. The group controls about 40 percent of global crude supply.
To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.netGrant Smith in London at gsmith52@bloomberg.net
