BLBG:Crude Oil Rebounds From Two-Week Low on U.S. Stockpiles, Saudi Violence Q
Oil rose from the lowest price in two weeks following a surprise drop in U.S. stockpiles and violence in Saudi Arabia, while data from Germany countered concern that Europe’s debt crisis will threaten growth.
New York futures gained as much as 0.7 percent after earlier swinging between gains and losses. Crude inventories declined last week to the lowest since January 2010, according to an Energy Department report yesterday. Saudi Arabia said four people were killed in violence in the kingdom’s eastern province, the official Saudi Press Agency reported. German business confidence unexpectedly rose for the first time in five months in November.
“Oil is holding the banner high, with strong demand for heating oil as we move into the winter combined with the lack of sweet crude from Libya,” said Thorbjorn Bak Jensen, an analyst at Global Risk Management in Middelfart, Denmark, who forecasts Brent will average $107 a barrel this quarter.
Crude for January delivery rose as much as 71 cents to $96.88 a barrel in electronic trading on the New York Mercantile Exchange. It was at $96.81 at 9:40 a.m. London time. The contract earlier lost as much 53 cents. Prices have gained 5.9 percent this year.
Floor trading is closed today for the U.S. Thanksgiving holiday and electronic transactions will be booked with tomorrow’s trades for settlement purposes.
Brent oil for January settlement on the London-based ICE Futures Europe exchange was at $107.85 a barrel, up 83 cents. The European benchmark crude was at a premium of $11.08 to New York-traded West Texas contracts. The spread reached a record $27.88 on Oct. 14.
German Business Climate
Oil dropped to the lowest since Nov. 9 yesterday after Germany failed to find buyers for 35 percent of bonds at an auction. Today’s business climate index from the Munich-based Ifo institute, based on a survey of 7,000 executives, increased to 106.6 from 106.4 in October. Economists expected a decline to 105.2, according to the median of 40 forecasts in a Bloomberg News survey.
U.S. crude’s 200-day moving average is at $95.50 a barrel today, according to data compiled by Bloomberg. Buy orders tend to be clustered near chart-support levels. The market may extend losses to $90 this month if futures settle below this indicator, said Ken Hasegawa, a commodity-derivatives trading manager at Newedge Group in Tokyo.
Inventory Report
U.S. crude stockpiles fell 6.22 million barrels in the week ended Nov. 18 to 330.8 million barrels, according to yesterday’s Energy Department report, the biggest drop in nine weeks. Supplies were expected to climb 500,000 barrels, based on the median estimate of 13 analysts surveyed by Bloomberg News.
“The decrease in inventory is going to be a supportive factor to keep crude oil from losing too much ground,” said Hasegawa. “One hundred dollars is not far from now but I really doubt it will exceed the recent high of around $103.”
Distillate-fuel stockpiles declined 770,000 barrels to 133 million, the lowest since December 2008, the report showed. Stockpiles were down for an eighth week. Gasoline inventories surged 4.48 million barrels, the most since January.
Goldman Sachs Group Inc. yesterday raised its forecast for West Texas crude to $102 a barrel for the first quarter. The bank cited a Nov. 14 announcement by Enbridge Inc. that it would reverse the Seaway pipeline to boost the flow of oil from Cushing to the Gulf of Mexico. The storage hub in Oklahoma is the delivery point for New York-traded crude futures.
The European Union accounted for 16 percent of world oil demand in 2010, according to BP Plc’s annual Statistical Review of World Energy. The U.S. consumed 19.1 million barrels a day, or 21 percent of the global total.
To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
