BLBG:Oil Advances Before ECB Decision, U.S. Crude Supply Data
Oil rose in London on forecasts that the European Central Bank will cut interest rates today and that U.S. inventory data will show crude supplies declined.
Brent futures gained as much as 1 percent. U.S. crude stockpiles probably decreased by 2.3 million barrels last week, according to a Bloomberg survey before an Energy Department report today. The ECB will take its benchmark interest rate below 1 percent for the first time, cutting it by a quarter percentage point to 0.75 percent, and reduce its deposit rate to zero, according to a Bloomberg News survey of economists.
“We are getting an extension of the rally initiated last week that is driven by expectation of rate cuts by the ECB,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London.
Brent oil for August settlement was at $100.55 a barrel, up 78 cents, on the London-based ICE Futures Europe exchange at 10:06 a.m. local time. It dropped 0.9 percent yesterday to $99.77. The European benchmark’s premium to the U.S. benchmark, West Texas Intermediate, rose to $13.05 from $12.11 yesterday.
Oil for August delivery on the New York Mercantile Exchange was at $87.60 after declining as much as $1.16 to $86.50 a barrel in electronic trading. There was no floor trading yesterday because of the U.S. Independence Day holiday and transactions since the July 3 closed will be booked with today’s trades for settlement purposes. Prices are down 11 percent this year.
To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
