BLBG:Oil Advances To 3-Month High Before Europe Debt Meetings
Oil climbed to the highest in three months in New York as speculation European leaders meeting this week will make progress on the region’s debt crisis supported prices against forecasts of rising supply in the U.S.
Futures gained as much as 0.8 percent after halting a four- day advance yesterday. European leaders will hold meetings in Greece and Germany this week. U.S. oil supplies probably gained for the first time in about a month as imports climbed and demand fell from a nine-month high, a Bloomberg survey showed before an Energy Department report tomorrow. Crude is trading below its 200-day moving average.
“At the moment, signs for a Euro zone solution are positive,” said Guy Wolf, a strategist at London-based commodities broker Marex Spectron Group Ltd. “But we’ve been here before with Europe and converting intentions into actions has been too much for them. Oil supply has been tightening, but the demand environment is extremely poor.”
Crude for September delivery rose as much as 78 cents to $96.75 a barrel in electronic trading on the New York Mercantile Exchange, trading for $96.55 at 8:36 a.m. London time. That is the highest intraday level since May 11. The contract expires today. The more-actively traded October future rose 38 cents to $96.64. Front-month prices are down 2.3 percent in 2012.
Brent oil for October settlement was at $114.04 a barrel, up 38 cents, on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate was at $17.36, compared with $17.44 yesterday.
Technical Resistance
Oil in New York has technical resistance along its 200-day moving average, about $96.72 a barrel today, according to data compiled by Bloomberg. Futures yesterday advanced close to this indicator before settling lower for the day. Sell orders tend to be clustered near chart-resistance levels.
Luxembourg Prime Minister Jean-Claude Juncker, the head of the euro group of finance ministers, visits Greece tomorrow to discuss the indebted nation’s fiscal adjustment program. German Chancellor Angela Merkel and French President Francois Hollande meet in Berlin Aug. 23 to discuss the fiscal crisis, and both are set to talk separately with Greece’s Prime Minister Antonis Samaras later in the week.
“Technically, we feel that crude is trading at resistance,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “The EU meetings are tentatively being viewed. I see the only solution is to provide more time for Greece.”
Rising Stockpiles
U.S. crude stockpiles probably rose 900,000 barrels last week, according to the median response in a Bloomberg News survey. Inventories of 366.2 million barrels in the week ended Aug. 10 were about 8 percent above the five-year average for this time of year. Gasoline supplies probably decreased by 1 million barrels and distillate fuel, including heating oil and diesel, gained by 1 million, the survey shows.
“The market has been watching what’s been happening with U.S. inventories over the past five to six weeks,” said David Lennox, an analyst at Fat Prophets in Sydney. “Stockpiles are still high, that’s why we’re not seeing the price rattle up to $100. We’ve also had a fairly benign storm season so far.”
The industry-funded American Petroleum Institute will release separate inventory data today. The API collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its survey.
Prices also gained before reports later this week that may show the U.S. economy is starting to strengthen after a second- quarter slowdown. Combined purchases of new and existing houses increased in June, according to the median forecast in a Bloomberg survey. The National Association of Realtors will release existing sales on Aug. 22, with the Commerce Department publishing data on new sales the next day.
The U.S. National Hurricane Center is tracking three potential storms in the Atlantic basin. A low pressure system about 800 miles east of the Lesser Antilles has an 90 percent chance of becoming tropical in the next two days, the center said at 8 p.m. East Coast time. A system off the eastern coast of Mexico has a 30 percent chance of developing and one south of the Cape Verde Islands has a 40 percent chance.
To contact the reporter 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
