BLBGOil Trades Near Six-Week Low in New York, Heads for Second Weekly Decline
Oil traded near a six-week low and headed for a second weekly decline in New York while remaining above moving averages that tend to support buying.
Futures were little changed in New York after falling 1.1 percent yesterday on reports that showed U.S. industrial production shrank for the first time since April and European factory output contracted. The contract gained as much as 0.6 percent earlier today 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.
“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 0.1 percent to $93.99 a barrel in electronic trading on the New York Mercantile Exchange at 4:39 p.m. Singapore time. The contract yesterday declined to $93.87, the lowest close since Nov. 2.
Prices are down 5.5 percent since Dec. 9, heading for a second weekly decrease and the biggest since the period ended Sept. 23. West Texas Intermediate futures are 2.9 percent higher this year after climbing 15 percent in 2010.
U.S. Indicators
Brent oil for February settlement was at $104.06 a barrel, up 46 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 $9.91, compared with a record $27.88 on Oct. 14.
Manufacturing in the New York region expanded the most in seven months in December, the Federal Reserve Bank of New York’s general economic index showed yesterday. 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. Jobless claims last week were the lowest since May 2008, according to Labor Department data.
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.
A gauge of euro-region manufacturing was at 46.9 in December, according to London-based Markit Economics yesterday. A number below 50 signals contraction.
Middle East Exports
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 a third of the world’s oil, may increase output in the four weeks to Dec. 24 by 0.6 percent as Libya raises production, Oil Movements said. Exports by all Middle East producers, including non-OPEC members, may drop, the Halifax, England-based researcher said yesterday in a report.
Crude oil may fall next week on speculation that Europe’s economy will contract as the region’s debt crisis spreads, a Bloomberg News survey showed.
Nine of 17 analysts, or 53 percent, forecast oil will decrease through Dec. 23. Six respondents, or 35 percent, predicted prices will increase and two estimated there will be little change. Last week, 41 percent of surveyed analysts expected a decline.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Christian Schmollinger in Singapore at christian.s@bloomberg.net
To contact the editor responsible for this story: Paul Gordon at pgordon6@bloomberg.net
