SMH:Oil gains as US supplies counter debt concerns
Oil climbed in New York as signs of shrinking crude stockpiles in the US and rising demand in China countered speculation that Europe’s debt crisis will temper fuel consumption.
Futures advanced as much as 0.5 per cent before a report tomorrow that may show US inventories dropped a seventh week. Prices also rose after China said its apparent fuel consumption rose 7.2 per cent in the first half. Crude slipped yesterday amid concern Europe’s leaders will be unable to agree on steps to contain the region’s debt crisis at a summit this week.
“It’s summer drive-time, inventories are coming back a bit and people are suggesting that the economy is not going to falter,” said Jonathan Barratt, a managing director of Commodity Broking Services, who predicts oil in New York will average $US100 a barrel this year. “The market’s not decided as to what the consequences are to oil yet” from the debt situation, he said.
Crude for August delivery gained as much as 45 cents to $US96.38 a barrel in electronic trading on the New York Mercantile Exchange, and was recently at $US96.15. The contract yesterday declined $US1.31 to $US95.93, the lowest since July 14. Prices are up 26 per cent the past year. The more actively traded September future climbed 24 cents to $US96.49.
Brent oil for September settlement rose as much as 45 cents, or 0.4 per cent, to $US116.50 a barrel on the ICE Futures Europe exchange. Prices are 54 per cent higher the past year.
Crude stockpiles
An Energy Department report may show US crude supplies fell 1.5 million barrels for a seventh week in the seven days ended July 15, according to the median of 10 analyst estimates in a Bloomberg News survey. Gasoline inventories probably slid 100,000 barrels from 211.7 million, the survey shows.
Brent crude may climb to more than $US123 a barrel if prices can exceed a series of “swing highs,” according to technical analysts at FuturesTechs.com. The contract may advance to $US123.22 if it breaks through a sequence of pivot points formed by earlier peaks, beginning at $US119.86 to $US119.87, FuturesTechs said in a report yesterday.
Oil’s climb in New York may stall along the 50-day moving average, at $US97.50 a barrel today, according to data compiled by Bloomberg. Front-month futures last settled above this indicator on May 5. A breach of technical resistance usually means prices will continue to rise.
Europe crisis
European Union government chiefs plan to meet for the second time in a month on July 21, aiming to break a deadlock over a new Greek rescue that has spooked investors. Spanish and Italian bonds yields surged yesterday, piling pressure on officials to end the turmoil. Spain and Greece will sell as much as 5.75 billion euros of bills today.
Oil has risen 5.6 per cent since the International Energy Agency announced a release of strategic stockpiles to help quell prices. IEA member nations are likely to decide against offering more oil after last month’s release failed to curb prices and Middle East output rose, according to a Bloomberg News survey. The IEA will say on about July 23 whether they will continue emergency sales to make up for supply choked off by the Libyan conflict.
Bret, the second tropical storm of the Atlantic hurricane season, is moving northeast away from the coast of Florida on a track that will take it out to sea, the US National Hurricane Centre said. In the eastern Pacific, Tropical Storm Dora formed yesterday about 400 miles (644 kilometres) south-southeast of Salina Cruz, Mexico, the centre said.
