BLBG:Oil Trades Near $100 as Rising U.S. Stockpiles Counter Iran Supply Threat
Oil traded near $100 a barrel in New York as signs of rising U.S. crude stockpiles capped gains after a report showed gasoline demand rose last week and Iran criticized a European embargo on its crude.
Futures were little changed after dropping 0.6 percent yesterday. Inventories increased 7.33 million barrels last week, the biggest gain in four weeks, figures from the American Petroleum Institute showed. U.S. gasoline demand rose for a second week, according to data from MasterCard Inc. The European Union embargo on Iranian oil imports will “bear bitter fruit,” Iran’s Foreign Affairs Ministry said this week.
“We’re holding a reasonable level based on an outlook for some, but low, demand growth and against a background of potentially relatively tight supply,” said Ric Spooner, a chief analyst at CMC Markets in Sydney. “Overall, the tone of the oil market is broadly firm.”
Crude for March delivery was at $99.09 a barrel, up 14 cents, in electronic trading on the New York Mercantile Exchange at 2:48 p.m. Sydney time. The contract yesterday fell 63 cents to $98.95, the lowest since Jan. 20. Front-month prices are 15 percent higher the past year.
Brent oil for March settlement was at $110.48 a barrel, up 45 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $11.39, compared with a record $27.88 on Oct. 14.
Fuel Demand
U.S. gasoline demand increased 1.3 percent in the seven days ending Jan. 20. Drivers bought 8.48 million barrels a day of the fuel, up from 8.37 million the prior week, according to MasterCard’s SpendingPulse report yesterday.
Gasoline stockpiles fell 573,000 barrels last week, data from the industry-funded American Petroleum Institute showed late yesterday. An Energy Department report later today may indicate they gained 2 million barrels, according to the median of 12 analyst estimates in the Bloomberg News survey.
Crude supplies probably climbed 1.45 million barrels to 332.7 million last week, according to the survey. The Energy Department is scheduled to release its weekly report at 10:30 a.m. today in Washington.
Iran has threatened to close the Strait of Hormuz in retaliation for the ban on its oil exports, which is part of efforts by the EU and the U.S. to pressure the Persian Gulf state over a nuclear program that Western nations say is aimed at producing weapons. The waterway is a transit route for about a fifth of the world’s crude.
The decision was “aggressive” and said it will have “negative consequences” in Europe, including higher oil prices, the Iranian Foreign Ministry said in a statement earlier this week.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
