BLBG:Crude Oil Rises for an Eighth Day in London on Euro Optimism, Cold Snap
Oil rose for a eighth day in London on optimism Greece will receive a second bailout and as freezing weather in Europe boosted demand for heating.
Brent crude climbed as much as 0.8 percent, headed for the longest rising streak since October 2009. Oil in New York rose a third day, gaining as much as 0.7 percent. Greek Finance Minister Evangelos Venizelos said he hoped for a “positive decision” on a loan package when he meets European policy makers in Brussels today. The euro rose against the dollar, making commodities priced in the U.S. currency more attractive.
“It’s a range of reasons to explain the uptick in crude: optimism that Greece will get the aid package so that lifts the risk appetite somewhat,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said by phone. “Cold weather is here in Europe that may last until the end of the month which will lead to higher consumption of heating oil which is supportive for Brent oil prices.”
Brent oil for March settlement on the ICE Futures Europe exchange in London rose as much as 97 cents to $118.17 a barrel and was at $117.79 at 10:19 a.m. London time. The contract has gained 6.1 percent this month.
Crude for March delivery on the New York Mercantile Exchange was at $99.21 a barrel, up 50 cents, after rising as much as 64 cents to $99.31. The contract increased 0.3 percent yesterday to $98.71, the highest since Jan. 30.
The European benchmark crude’s premium to the New York- traded West Texas Intermediate grade widened to $18.58. The spread reached a record-high $27.88 on Oct. 14.
Greek Debt
A euro-region official said a Greek default will not be on the agenda of today’s emergency finance ministers’ meeting, which starts at 6 p.m. in Brussels.
“There are issues outstanding that must be resolved,” Venizelos told reporters in Athens today after a meeting with Prime Minister Lucas Papademos and European Union and International Monetary Fund officials that ended just before 6 a.m. local time. “As the prime minister said, there is agreement on all the issues bar one.”
The 27 EU member states accounted for 16 percent of global oil demand last year, according to BP Plc’s annual Statistical Review of World Energy.
The euro gained as much as 0.4 percent against the dollar. The European Central Bank is likely to keep its benchmark interest unchanged at today’s meeting in Frankfurt, economists surveyed by Bloomberg News predicted.
Oil Stockpiles
The Organization of Petroleum Exporting Countries publishes its monthly market report at 12:30 p.m. in Vienna.
Oil may extend its rally in New York as futures approach a “golden cross” formation on the daily technical chart, according to data compiled by Bloomberg. The 100-day moving average, at $94.43 a barrel today, has pared a discount to the 200-day mean to 24 cents, the smallest since mid-September. Investors tend to buy contracts when a shorter-term moving average rises above a longer-term one.
U.S. refineries operated at 83 percent of capacity, up 1 percentage point from the previous week, according to an Energy Department report yesterday.
U.S. crude inventories rose by 304,000 barrels to 339.2 million in the week ended Feb. 3, according to the report. A median gain of 2.5 million barrel was forecast by analysts in a Bloomberg News survey. Imports fell 5.3 percent.
Gasoline surged to the highest price in more than five months on speculation refinery shutdowns in Europe and the U.S. will trigger a supply crunch. Gasoline for March delivery in New York climbed 0.4 percent to $2.9870 a gallon today. It rose 4.77 cents to $2.9752 a gallon yesterday, the highest settlement since Aug. 31.
Imports of the motor fuel dropped 32 percent last week, the Energy Department said. Stockpiles rose 1.6 million barrels, more than a projected 875,000 barrel gain. Distillate-fuel inventories, including heating oil and diesel, increased 1.2 million barrels, compared with a forecast for supplies to decline 875,000 barrels.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net Nidaa Bakhsh in London at nbakhsh@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
