BLBG:Oil Trades Near Three-Day High on IMF Pledge; Iraq Halts Exports
Oil traded near the highest level in three days after Iraq halted some crude exports and International Monetary Fund members pledged more than $430 billion to help protect the global economy.
Futures were little changed in New York after rising 0.2 percent last week. Iraq stopped shipments from northern fields because of a fault at a pipeline network in neighboring Turkey, the Oil Ministry said. IMF members agreed to almost double commitments to the fund at its spring meetings in Washington yesterday. A survey released today showed manufacturing in China, the world’s second-biggest crude consumer, may contract for a sixth month.
“Globally, we’re walking the tightrope between falling off into recession and launching into a sustainable boom, and the current calm state of oil prices is reflecting that,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “We’re likely to ping-pong around until we get some direction on global growth prospects.”
Crude for June delivery was at $103.73 a barrel, down 15 cents, in electronic trading on the New York Mercantile Exchange at 2:21 p.m. Sydney time. The contract rose 1.1 percent to $103.88 on April 20, the highest close since April 17. Front- month prices are 5 percent higher this year.
Brent oil for June settlement was at $118.78 a barrel, up 2 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s front month premium to West Texas Intermediate was at $15.05, compared with $14.88 on April 20.
Iraq Halt
Exports from Iraq’s northern fields stopped at 7:45 p.m. on April 21, the ministry said in a statement on the website of the official National Media Center yesterday. The country normally exports 450,000 to 500,000 barrels a day through Turkey.
Iraq, the third-largest producer in the Organization of Petroleum Exporting Countries, pumped an average of 2.81 million barrels a day last month, according to estimates compiled by Bloomberg. It ships most of its oil from the south on tankers sailing from the Persian Gulf.
IMF members agreed to pledge extra funding amid concern that the global economic recovery is slowing and after Managing Director Christine Lagarde said she needed to ensure the body is able to protect troubled countries. She fell short of her original $600 billion goal as the U.S. declined to chip in, while Canada proposed making it harder for Europe to tap aid.
Economic Outlook
The preliminary reading of HSBC Holdings Plc and Markit Economics’ Chinese purchasing managers’ index came in at 49.1 for April, compared with a final 48.3 in March. A number below 50 signals a contraction. The report adds pressure on officials to adopt more policies to stimulate economic growth.
Oil may be supported by increased demand in the U.S., the world’s biggest user of the commodity. Consumer spending may have risen 2.3 percent last quarter, according to the median estimate in a Bloomberg News survey before an April 27 Commerce Department report. That would be the biggest increase since the end of 2010.
U.S. gasoline demand climbed in March for a second month as total fuel consumption declined, the industry-funded American Petroleum Institute said April 20 in a report. Deliveries of the motor fuel, a measure of consumption, rose 3 percent to 9.01 million barrels a day last month from March 2011 in the second year-on-year demand gain since February 2011, the API said.
Total deliveries of petroleum products fell 1.3 percent to 19 million barrels a day in March, the API report shows. The peak U.S. demand period for gasoline starts with the Memorial Day holiday in May and ends on Labor Day in early September.
Driving Season
“We’re entering the driving season so consumer confidence will be a guide to what sort of consumption of petrol we’ll see over the period,” said McCarthy. “Any expansion of activity will be seen as a positive and supportive of higher oil prices.”
The average price for regular gasoline at filling stations fell 5.44 cents to $3.9127 a gallon, according to Lundberg Survey Inc. The survey covers the two-week period ended April 20 and is based on information received from about 2,500 stations by the Camarillo, California-based company. The price is 3.27 cents higher than a year earlier, when the average was $3.88.
Money managers, including hedge funds, commodity pools and commodity trading advisers, increased bullish oil wagers by 7,477, or 3.9 percent, to 199,304 futures and options combined in the seven days ended April 17, according to the Commodity Futures Trading Commission’s Commitments of Traders report on April 20. It was the first gain in five weeks.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Mike Anderson at manderson34@bloomberg.net
