BLBG:Oil Rises a Sixth Day on Bets European Bank Proposals Will Support Demand
Oil traded near its highest in two weeks in New York on speculation that proposals on European bank recapitalization will support economic growth and fuel consumption.
Futures were little changed, capping a five-day winning streak that was the oil’s longest this year. European Commission President Jose Barroso is due to outline plans in Brussels today. The International Energy Agency, which today cut forecasts for global oil demand in 2012, said recent data does not signal a “downward consumption spiral.”
“There’s still robust growth but it’s being affected by this economic slowdown,” David Fyfe, head of the IEA’s industry and markets division, said in an interview with Maryam Nemazee on Bloomberg Television’s “The Pulse.” The IEA doesn’t “think the balance of probabilities has tipped towards that much weaker picture of economic growth for next year.”
Crude for November delivery was at $85.91 a barrel, up 10 cents, in electronic trading on the New York Mercantile Exchange at 10:03 a.m. London time. The contract climbed 0.5 percent yesterday to $85.81, the highest close since Sept. 21. Prices are down 5.9 percent this year.
Brent oil for November settlement rose 32 cents to $111.05 on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of as much as $25.70 to U.S. crude, the most since Sept. 15 and down from a record of $26.87 on Sept. 6.
The Paris-based IEA reduced estimates for world demand in 2012 by 210,000 barrels a day, to 90.5 million a day. That means consumption will increase by 1.3 million barrels a day, or 1.4 percent, from this year. Oil inventories in industrialized nations fell below their five-year average for the first time in more than three years, according to the IEA.
U.S. crude-oil stockpiles probably rose by 800,000 barrels last week, according to the median of 15 analyst estimates in a Bloomberg News survey before a weekly Energy Department report tomorrow. The department is releasing the data a day later than usual because of this week’s Columbus Day holiday.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
