March 26 (Bloomberg) -- Crude oil pared losses as the dollar fell against the euro and on optimism that Asia’s emerging economies will bolster fuel demand.
Oil traded above $80 a barrel after the euro rose from a 10-month low on hopes that European leaders will agree on how to rescue Greece at the end of a two-day summit in Brussels today. A weaker dollar increases the appeal of commodities as an inflation hedge. OPEC is poised to increase shipments in the month ending April 10, led by Asian demand, according to tanker- tracker Oil Movements.
“If there’s any upward movement in OPEC supply at this time, it’s probably coming to Asia,” said Geoff Clear, head of Asia commodities at Australia & New Zealand Banking Group Ltd. in Singapore. “I still have a really difficult time trying to build a sustainable bullish argument for the dollar. It’s actually a weakness continuing in the European economy, that’s probably what’s showing up here.”
Crude oil for May delivery traded at $80.80 a barrel, up 27 cents, in electronic trading on the New York Mercantile Exchange at 12:43 p.m. Singapore time. Yesterday, it declined 8 cents to $80.53. Futures are poised for a 0.1 percent gain this week, after two weeks of decline.
The euro advanced to $1.3342 as of 1:19 p.m. in Tokyo from $1.3273 in New York yesterday, after earlier falling to $1.3268, the weakest level since May 7. The euro gained for the first time in four days versus the dollar after European Central Bank President Jean-Claude Trichet toned down his opposition to the International Monetary Fund’s involvement in a Greek rescue plan.
OPEC Shipments
The Organization of Petroleum Exporting Countries is set to increase shipments by 1.7 percent in the month ending April 10, led by Asian demand, according to Oil Movements.
OPEC, which supplies about 40 percent of the world’s crude, will ship 23.39 million barrels a day in the four-week period, compared with 22.99 million in the month ended March 13, the Halifax, England-based consultant said yesterday in a report. The data excludes Ecuador and Angola.
Oil prices will jump almost 20 percent this year, driven by demand from China and emerging markets, according to UniCredit SpA. Prices may rise to $95 a barrel in the fourth quarter and $115 by the end of 2011 from $81 today, said Jochen Hitzfeld, an analyst at UniCredit in Munich.
Crude Survey
Crude futures may fall next week as U.S. inventories increase on higher imports, a Bloomberg News survey showed. Twenty-one of 55 analysts, or 38 percent, forecast oil will decline through April 1. Nineteen respondents, or 35 percent, predicted that futures will be little changed and fifteen said the contract will climb. Last week, 45 percent of analysts said there would be a drop in prices.
U.S. stockpiles of crude oil rose 7.25 million barrels to 351.3 million last week, leaving supplies 6.4 percent above the five-year average for the period, according to an Energy Department report on March 24. It was the eighth straight advance and the longest string of gains since May.
Gasoline stockpiles fell 2.72 million barrels in the week ended March 19, the Energy Department report showed. Supplies of distillate fuel, a category that includes heating oil and diesel, declined 2.42 million barrels to 145.7 million.
U.S. gasoline consumption peaks during the so-called summer driving season, which lasts from the Memorial Day weekend in late May to Labor Day in early September.
Brent crude oil for May settlement traded at $79.91 a barrel, up 30 cents, on the London-based ICE Futures Europe exchange at 12:32 p.m. Singapore time. Yesterday, the contract declined 1 cent to end the session at $79.61 a barrel.
To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.net
