BLBG:Oil Near 3-Day High as Shrinking Stockpiles Counter European Debt Concern
Oil traded near a three-day high in New York as shrinking U.S. crude stockpiles countered concern that the European sovereign debt crisis is worsening.
Futures were little changed after slipping as much as 2.1 percent. Crude inventories dropped the most since December last week, an Energy Department report showed. They were forecast to climb a third week, according to the median analyst estimate in a Bloomberg News survey. U.S. equities dropped yesterday and costs to protect French debt reached a record.
“The market is telling us that down the lower end of the range we should see reasonable demand come to the commodity,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, who kept his forecast for New York crude oil to average $100 a barrel this year. “It’s a confidence game at the moment.”
Crude for September delivery was at $82.88 a barrel, down 1 cent, in electronic trading on the New York Mercantile Exchange at 4:19 p.m. Sydney time. It earlier dropped as much as $1.75 to $81.14. The contract yesterday rose $3.59, or 4.5 percent, to $82.89, the highest since Aug. 5. Prices are 6.2 percent higher the past year.
Brent oil for September settlement slid 26 cents, or 0.2 percent, to $106.42 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract traded at a premium of $23.64 to U.S. futures, compared with yesterday’s record close of $23.79.
U.S. Futures Gain
Standard & Poor’s 500 futures increased 1.8 percent at 3:21 p.m. in Tokyo, after the index’s 4.4 percent slump yesterday. Euro Stoxx 50 futures added 1.8 percent. The MSCI Asia Pacific Index lost 0.5 percent, paring a slump of as much as 2.4 percent.
Central bankers are trying to restore investor confidence, with the Federal Reserve pledging to keep interest rates near zero through at least mid-2013 to bolster U.S. growth and the European Central Bank is buying bonds to stem a contagion that’s threatening to spread to France.
U.S. crude-oil inventories decreased 5.23 million barrels to 349.8 million last week, according to an Energy Department report. It was the biggest decline since the week ended Dec. 17. Inventories were forecast to climb 1.35 million barrels, according to a Bloomberg News survey of analysts.
Total products supplied, a measure of demand, surged 652,000 barrels a day to 20.3 million, the highest level since Dec. 24, according to the report. Gasoline stockpiles dropped 1.59 million barrels to 213.6 million.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Jane Lee in Kuala Lumpur at jalee@bloomberg.net
