BLBG: Oil Futures Head for Biggest Weekly Gain in Two Months on U.S. Economy
Oil in New York rose, heading for its biggest weekly gain in two months, as U.S. economic reports signaled that growth in the world’s biggest crude consuming- country will accelerate.
Futures increased as much as 0.7 percent after orders for U.S. durable goods rose in November by the most in four months. Initial jobless claims fell to the lowest level since April 2008 and leading indicators advanced more than forecast last month, data showed yesterday. Crude in New York has advanced 6.6 percent this week, the biggest gain since Oct. 28.
“Recent U.S. economic data has been has been more positive than negative lately,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “This has a set a more positive tone for the market going into the New Year.”
Crude oil for February delivery rose 19 cents to $99.72 a barrel at 10:46 a.m. on the New York Mercantile Exchange. The contract touched $100.23, the highest intraday level since Dec. 14. Futures have climbed 9.1 percent this year after increasing 15 percent in 2010.
Nymex energy contracts close early at 1:30 p.m. New York time today and remain shut on Dec. 26 because of the Christmas holiday. This applies to both floor and electronic trading. Electronic trading begins at 6 p.m. on Dec. 26 for the next day’s settlement price.
Brent oil for February settlement gained 16 cents to $108.05 a barrel on the London-based ICE Futures Europe exchange. The European contract’s premium to Nymex crude was $8.33 a barrel, compared with $8.36 yesterday, which was the smallest differential based on closing prices since March 8. The spread surged to a record $27.88 on Oct. 14.
Durable Goods
Bookings for equipment meant to last at least three years rose 3.8 percent, data from the Commerce Department showed today in Washington. The previous month was revised to unchanged from a decline.
U.S. initial unemployment claims fell by 4,000 to 364,000 last week, Labor Department figures showed yesterday. The Conference Board’s gauge of the outlook for the next three to six months rose 0.5 percent, versus a median forecast of 0.3 percent in a Bloomberg survey. The Thomson Reuters/University of Michigan final index of consumer sentiment increased more than expected in December.
Pressure on Iran
The European Union and the U.S. are seeking support from the Middle East and Asia for sanctions to increase pressure on Iran to abandon a suspected nuclear weapons program. Iran’s navy will hold 10 days of maneuvers east of the Strait of Hormuz, state-run Fars news agency reported yesterday, citing Navy Commander Habibollah Sayari.
About 15.5 million barrels of oil a day flows through the waterway between Iran and Oman at the mouth of the Persian Gulf, according to the U.S. Energy Department. Sayari said Iran’s military has the capability to “control” the strait, according to a second Fars report. Whether it chooses to close the channel “depends on the decision of Iran’s higher officials,” he said.
“It’s hard to see anyone going away short for three days with all of this turmoil in the Middle East,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, which oversees $1.3 billion. “The risks of something going bad are above normal at the moment.”
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
