BLBG:Oil Rises First Time in 3 Days; Brent Gap Widest in Year
Oil halted a two-day slide as optimism that European finance ministers will make progress in taming the region’s debt crisis countered signs that crude supplies are excessive amid a global economic slowdown.
West Texas Intermediate crude gained as much as 1.1 percent after the European ministers welcomed Greece’s determination to cut spending and reshape its recession-wracked economy. The commitment improves chances that regional aid will keep flowing and stop Greece from abandoning the euro. U.S. oil supplies probably rose after crude production climbed to the highest level in more than 15 years and imports increased, a Bloomberg survey showed before an Energy Department report on Oct. 11.
“The continuing tension between bullish and bearish factors will keep oil trading in a range in the very short- term,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London, who predicts Brent crude will slip to about $110 a barrel.
Crude for November delivery climbed as much as $1 to $90.33 a barrel in electronic trading on the New York Mercantile Exchange and was at $89.79 at 10:58 a.m. London time. The contract dropped 55 cents to $89.33 yesterday, the lowest close since Oct. 3. Prices are down 9 percent this year.
Brent oil for November settlement gained 74 cents, or 0.7 percent, to $112.56 a barrel on the London-based ICE Futures Europe exchange. Prices are up 4.8 percent this year.
Brent-WTI Spread
Brent’s premium to WTI rose to as much as $22.85 a barrel, the highest in a year, according to Bloomberg calculations of exchange data. That’s up from $22.49 yesterday, which was the widest close since Oct. 20 last year.
“Geopolitical risks, manifested most recently in skirmishes between Turkey and Syria, are supporting the European benchmark to a greater extent than its U.S. counterpart,” David Wech, managing director at Vienna-based analysts JBC Energy GmbH, said in a report today.
Turkey deployed additional tanks and missile defense systems on the Syrian border yesterday as artillery units responded to fire from President Bashar al-Assad’s armed forces. Tensions between the two countries have risen with the 19-month rebellion against Assad’s government, and Turkey voicing support for the rebels.
Saudi Arabia will help to satisfy all demand for crude, Ali al-Naimi, the kingdom’s oil minister, told reporters in Riyadh today ahead of a meeting with his counterparts from member states of the Gulf Cooperation Council.
“We will work towards moderating the price,” al-Naimi said. “We will meet the market demands fully.”
Bollinger Band
Iraq is set to more than double oil production to 6.1 million barrels a day by 2020, providing almost half of the increase in global supplies this decade, according to the International Energy Agency. Iraq will make the biggest contribution to global oil supply growth over the next two decades and will overtake Russia by 2030 as the world’s second- largest exporter, the IEA said today in a report.
U.S. crude stockpiles probably rose 1.5 million barrels last week, according to the median estimate of nine analysts surveyed by Bloomberg News before the Energy Department report. That would be the first gain in three weeks.
Gasoline supplies and distillate inventories, a category that includes heating oil and diesel, probably each increased by 500,000 barrels, according to the survey.
The American Petroleum Institute will release separate stockpile data tomorrow. The API collects inventory 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 weekly survey.
Oil is rising in New York after rebounding yesterday from its lower Bollinger Band for a second day, signaling technical support, according to data compiled by Bloomberg. Buy orders tend to be clustered near chart-support levels. Crude’s 30-day stochastic oscillators have been below 30, a reading that indicates futures have fallen too far for further losses to be sustained.
To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net Nidaa Bakhsh in London at nbakhsh@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
