BLBG:Crude Oil Rises in New York; Poised for Biggest Quarterly Drop Since 2008
Oil rose in New York, paring the steepest quarterly drop since 2008, as investors speculated U.S. fuel demand will increase on signs the economy of the world’s biggest crude user is expanding faster than expected.
Futures climbed a second day after reports showed U.S. gross domestic product last quarter beat economists’ estimates and jobless claims dropped more than forecast. West Texas Intermediate’s discount to European Brent oil narrowed for a sixth day, the longest streak since March 2010. The U.S. contract has declined 13 percent since June 30 on concern economic growth will slow.
“The data out of the U.S. is supportive,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney. “Volatility continues for the oil market. I don’t expect it to push through $85 in a hurry.”
Crude for November delivery gained as much as $1.09, or 1.3 percent, to $83.23 a barrel in electronic trading on the New York Mercantile Exchange and was at $82.53 at 12:52 p.m. Sydney time. The contract yesterday climbed 1.2 percent to $82.14. Oil is down 7 percent this month. The quarterly drop is the biggest since the three months ended Dec. 31, 2008.
Brent oil for November settlement rose 29 cents, or 0.3 percent, to $104.24 a barrel on the London-based ICE Futures Europe exchange. Prices are down 7 percent this quarter. The European benchmark contract was at a premium of $21.71 to West Texas Intermediate futures.
Libyan Output
Brent climbed to a record of $26.87 more than WTI on Sept. 6 as fighting in Libya reduced the availability of light, sweet crude, or oil with low density and sulfur content. Libya is now producing 300,000 barrels a day of oil, said Ali Tarhouni, the official in charge of the North African nation’s finance and oil ministries, speaking to reporters in Tripoli yesterday.
The country’s output fell to 45,000 barrels a day last month, according to Bloomberg estimates, compared with the 1.6 million barrels a day the nation pumped in January.
The U.S. economy grew at a 1.3 percent pace in the second quarter, faster than the 1 percent estimated by the Commerce Department last month and beating the median forecast of 1.2 percent in a Bloomberg survey. Initial jobless claims last week fell to the lowest since April and pending homes sales in August declined less than expected.
European leaders are turning their focus to the next steps to stem the region’s debt crisis after German lawmakers approved an expansion of the euro-area rescue fund. With concern growing that Greece will be unable to avoid default, Greek Prime Minister George Papandreou will meet French President Nicolas Sarkozy today in Paris after seeing European Union President Herman Van Rompuy in Warsaw.
The U.S. and the European Union accounted for about 38 percent of global oil demand last year, according to BP Plc’s annual Statistical Review of World Energy.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
