Crude oil was little changed above $US81 a barrel in New York after rising for the first time in four days as advancing equity markets buoyed confidence that the economic rebound will spur fuel demand.
Oil rose 1 per cent yesterday as the MSCI World Index of equities in 24 developed nations climbed to a 12-week high amid speculation slower US jobs growth will prompt the Federal Reserve to extend efforts to strengthen the economy. US crude stockpiles probably declined last week, according to a Bloomberg News survey before an Energy Department report tomorrow.
“Sentiment in the oil market is very mixed,” Jonathan Barratt, managing director at Commodity Broking Services in Sydney. “We’re stuck in a range. If oil takes out $82.50, it’ll be a different ball game. It may test $85.”
Crude oil for September delivery was at $US81.49 a barrel, up 1 cent, in electronic trading on the New York Mercantile Exchange. Yesterday, the contract rose 78 cents to settle at $US81.48. Futures have climbed 16 per cent in the past year.
The MSCI index advanced 0.5 per cent in New York, the Standard & Poor’s 500 Index gained 0.6 per cent and the Dow Jones Industrial Average increased 0.4 per cent . The Federal Open Market Committee meets today.
A report that US companies hired fewer workers than forecast last month intensified a debate among economists over whether Fed policy makers will take an incremental step toward providing more stimulus.
Crude inventories
Crude stockpiles in the US probably declined 2 million barrels last week, according to the Bloomberg survey. Refineries probably ran at 90.7 per cent, down 0.5 percentage point from the prior week, the survey showed.
The Energy Department is scheduled to release its weekly report tomorrow in Washington.
Global refining margins, or the profit from turning crude oil into fuels such as gasoline and diesel, averaged $US4.58 a barrel from July 1 to Aug. 5, down 17 per cent from a second-quarter average of $US5.49 a barrel, according to data published yesterday by BP.
The margin along the US Gulf Coast, home to 43 per cent of the country’s refining capacity, was $US4.84 a barrel, down 27 per cent from the second-quarter average, according to BP’s Global Indicator Margin. Lower refinery margins reduce the incentive to buy and process oil into gasoline and other fuels.
Brent crude oil for September settlement traded at $US81.05 a barrel, up 6 cents, on the London-based ICE Futures Europe exchange. Yesterday, the contract rose 83 cents, or 1 per cent , to settle at $US80.99.
