BLBG:Oil Rises From Six-Week Low in New York; Poised for Second Weekly Decline
Oil rose from a six-week low as investors speculated that the biggest weekly decline since September is exaggerated.
Futures rose as much as 0.5 percent after falling 1.1 percent yesterday on Federal Reserve data that showed output at U.S. factories, mines and utilities slid last month for the first time since April. Separate reports showed better-than- expected manufacturing activity in the New York and Philadelphia regions and the lowest jobless claims in three years. Crude rebounded after reaching a technical support level.
“I’d be looking for oil to base around these levels and, barring any further major news flow before the year-end, I suspect that we’re probably now in a range and at the moment near the low point,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “The top point is $98.”
Crude for January delivery rose as much as 43 cents to $94.30 a barrel in electronic trading on the New York Mercantile Exchange and was at $94.18 a barrel at 3:01 p.m. Sydney time. The contract yesterday fell to $93.87, the lowest close since Nov. 2.
Prices are down 5.3 percent since Dec. 9, heading for a second weekly decline and the biggest since the period ended Sept. 23. West Texas Intermediate futures are 3.1 percent higher this year after climbing 15 percent in 2010.
Technical Support
Brent oil for February settlement was at $104.31 a barrel, up 71 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate for the same month was at $9.96, compared with a record $27.88 on Oct. 14.
Oil in New York is rebounding after reaching technical support along the lower Bollinger band, according to data compiled by Bloomberg. On the 30-day chart, this indicator is at $93.62 a barrel, close to where futures halted yesterday’s decline. Buy orders tend to be clustered near chart-support levels.
Crude exports from the Middle East, including non-OPEC members Oman and Yemen, may decline to 17.83 million barrels a day in the four weeks to Dec. 24 from 17.89 million in the previous four weeks, according to tanker-tracker Oil Movements.
Middle Eastern members of the Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s oil, may increase output by 0.6 percent as Libya raises production, the Halifax, England-based researcher said yesterday in a report.
Manufacturing in the New York region in December expanded the most in seven months as measures of employment and orders improved, the Federal Reserve Bank of New York’s general economic index showed. The Federal Reserve Bank of Philadelphia’s general economic index increased to 10.3, compared with a median estimate of 5 in a Bloomberg survey.
The U.S. was the world’s biggest oil-consuming nation last year, accounting for 21 percent of demand, according to BP Plc’s 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: Paul Gordon in Hong Kong at pgordon6@bloomberg.net
