BLBG: Oil in N.Y. Trades Near Highest in More Than a Week on U.S. Supply Decline
Oil traded near the highest in more than a week in New York after a government report showed an unexpected drop in U.S. crude inventories on increased refinery operating rates and supply disruptions.
Futures were near $100 a barrel after rising 3.3 percent yesterday and as much as 0.7 percent today. Stockpiles slipped 15,000 barrels last week to 370.3 million, the Energy Department said yesterday. Supplies were projected to rise 1.7 million barrels in a Bloomberg News survey. The U.S. imposed sanctions on Syrian President Bashar al-Assad and six other officials as his regime intensified a two-month crackdown on protesters.
“There is less risk aversion,” said Hannes Loacker, an analyst with Raiffeisen Bank AG in Vienna. “Downward potential is really limited because we still have these tensions in the Middle East-North Africa region and healthy demand growth from emerging markets.”
Crude for June delivery on the New York Mercantile Exchange rose as much as 69 cents to $100.79 a barrel and was at $100.61 at 12:27 p.m. London time. It advanced $3.19 to $100.10 yesterday, the highest settlement since May 10. The more- actively traded July futures rose 52 cents to $101.08. Month- ahead prices are up 44 percent the past year.
Brent crude for July settlement was at $112.82 a barrel, up 52 cents, on the London-based ICE Futures Europe exchange. Yesterday the contract increased $2.31, or 2.1 percent, to $112.30, the highest since May 13.
IEA Production Call
The International Energy Agency said today that oil producers need to increase supplies as prices are threatening the global economic recovery.
“There is a clear, urgent need for additional supplies on a more competitive basis to be made available to refiners to prevent a further tightening of the market,” the IEA’s governing board said today in an e-mailed statement. “The rise in oil prices since September is affecting the economic recovery.”
Imports of crude dropped 4.4 percent to 8.57 million barrels a day, the Energy Department report showed. Refineries operated at 83.2 percent of capacity, the most since the week ended April 1. Fuel imports declined 14 percent to 2.26 million barrels a day, the lowest since the week ended March 11.
Supplies of oil at Cushing, Oklahoma, the delivery point for the New York-traded West Texas Intermediate grade, fell 1.59 million barrels to 40 million. TransCanada Corp.’s 591,000 barrel-a-day Keystone pipeline was shut from May 7 until May 13 after a leak in North Dakota. It runs from Alberta to Cushing.
Gasoline Inventories
Gasoline inventories in the U.S. rose 119,000 barrels to 205.9 million in the week ended May 13. They were forecast to increase 950,000 barrels, according to the median of 16 analyst responses in the Bloomberg News survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, slid 1.16 million barrels to 143.1 million, the lowest since April 2009.
“The Department of Energy bucked analyst expectations and WTI reacted positively,” Stephen Schork, president of the Villanova, Pennsylvania-based Schork Group Inc., said in a note to clients today. “However, the draw was well below the draw seen in 2009 and 2008.”
Firefighters in northern Alberta, Canada, may begin to gain the upper hand over wildfires that shut a pipeline carrying crude from oil-sands projects, Alberta Sustainable Resource Development said.
Pipeline Shutdown
Fires forced Plains All American Pipeline LP to stop cleanup work from an earlier oil spill and shut down its Rainbow pipeline system on May 15. Canadian Natural Resources Ltd., Cenovus Energy Inc. and other producers have said they may curtail output because of the pipeline disruption.
Canada was the biggest source of U.S. oil imports last year, providing 1.97 million barrels a day, according to the Energy Department.
A report today may show sales of existing homes in the U.S. slowed. Sales rose 2 percent, or an annualized 5.1 million, in May, down from 3.7 percent growth in April, according to the median estimate of 75 economists in a Bloomberg News survey.
“People haven’t been so confident about a strong recovery in the U.S., so the market is at a loss where to go,” said Ken Hasegawa, a commodity-derivative sales manager at brokerage Newedge Group in Tokyo. “It’s possible for crude to close below $100 a barrel this week. Oil is in the center of a range between $95 and $105 a barrel.”
In Louisiana, 16 gates are open on the Morganza spillway, diverting the engorged Mississippi’s excess into the Atchafalaya River basin. The opening of the spillway for the first time since 1973 eased the threat of flooding for Baton Rouge, New Orleans and a major petrochemical zone.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
