BLBG:Oil Fluctuates After Crude Inventories Gain, Distillates Shrink
Oil fluctuated in New York after its biggest gain in a week. An industry report showed U.S. crude and gasoline stockpiles increased last week while distillate inventories declined.
West Texas Intermediate futures were little changed after advancing 0.5 percent yesterday, rebounding from the biggest decline in two months. Crude supplies rose 3.63 million barrels, the American Petroleum Institute said. The Energy Department will release separate data today that’s likely to show oil inventories rose to a seven-week high. The U.S. will tighten sanctions on Iran this week by keeping importers from paying for crude with dollars and euros. London-traded Brent’s premium to WTI widened for a sixth day.
“The U.S. is still somewhat weak in terms of its demand,” said David Lennox, an analyst at Fat Prophets in Sydney. “Their supply side is starting to look much better in terms of crude and that may keep a lid on prices. You don’t want to be short crude at the moment because of the geopolitical supply shock events that seem to be rippling below the surface.”
Crude for March delivery was 3 cents lower at $96.61 a barrel in electronic trading on the New York Mercantile Exchange at 12:02 p.m. Singapore time. The contract rose 0.5 percent yesterday, the biggest gain since Jan. 29. Prices slid 1.6 percent on Feb. 4, the most since Dec. 6. The volume of all contracts traded was 32 percent below the 100-day average.
Brent for March settlement climbed 12 cents to $116.64 a barrel on the London-based ICE Futures Europe exchange. The number of contracts exchanged was 37 percent more than the 100- day average.
Uptrend Channel
The European benchmark grade was at a premium of $20.03 to WTI. It expanded to $19.88 yesterday, the widest since Dec. 27. The gap has grown since Enterprise Product Partners LP said Jan. 31 that capacity on the Seaway pipeline to the Gulf Coast from Cushing, Oklahoma, will be limited until late 2013.
Oil’s rebound in New York stalled yesterday along the bottom of an uptrend channel that was breached the previous day, signaling technical resistance, where sell orders may be clustered. This indicator is around $97.50 a barrel today, according to data compiled by Bloomberg.
Distillate inventories, a category that includes heating oil and diesel, dropped 1.45 million barrels while gasoline supplies added 1.56 million, API data showed. The API collects stockpile 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.
Fuel Supplies
Crude supplies rose 2.65 million barrels last week, according to the median estimate of eight analysts in a Bloomberg News survey before the government report. Gasoline stockpiles gained 900,000 barrels and distillate inventories declined 625,000 barrels in the survey. The department is scheduled to release its inventory report at 10:30 a.m. today in Washington.
U.S. gasoline demand fell 1.6 percent last week to 8.5 million barrels a day for the seven days to Feb. 1, MasterCard Inc. said yesterday in its SpendingPulse report. The API data showed motor fuel consumption climbed 3.7 percent to 9.2 million barrels daily, the most since the week of Dec. 21.
Iran faces a fresh obstacle to turning its most lucrative export into cash as the U.S. tightens sanctions. Under penalty of expulsion from the U.S. banking system, Iranian crude customers such as China, Japan and India will be restricted to using their own currencies for the purchases, starting today. Importers will be compelled to keep the payments in escrow accounts that Iran can use only for locally sourced goods and services, in what will amount to barter arrangements.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
