BLBG:WTI Trades Near One-Week High; U.S. Crude Stockpiles Seen Rising
West Texas Intermediate oil traded near the highest level in more than a week after the biggest gain since January. U.S. crude stockpiles probably increased last week, a Bloomberg News survey shows.
Futures were little changed in New York after climbing 1.4 percent yesterday for the first advance in four days. Crude inventories probably rose 2.35 million barrels, according to the survey before an Energy Information Administration report tomorrow. London-traded Brent’s premium to WTI was steady after shrinking for the first time in eight days as Goldman Sachs Group Inc. said there will be a “substantial narrowing” of the spread because of new pipelines.
“We’re seeing adjustment from buyers to a better growth outlook overall,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. “Infrastructure developments in the U.S. suggest that in the longer-term that spread between Brent and WTI should come together.”
Crude for March delivery was at $96.89 a barrel, down 14 cents, in electronic trading on the New York Mercantile Exchange at 4:11 p.m. Sydney time. The volume of all futures traded was 13 percent below the 100-day average. The contract increased $1.31 to $97.03 yesterday, the most since Jan. 2 and the highest closing price since Feb. 1.
Brent for March settlement rose 7 cents to $118.20 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 9 percent above the 100-day average. The European benchmark grade was at a premium of $21.31 to WTI futures. The gap narrowed $2.08, the most since Dec. 17, to $21.10 yesterday.
Stockpile Report
U.S. crude inventories probably increased for a fourth week to 374 million barrels in the seven days ended Feb. 8, according to the median estimate of eight analysts in the Bloomberg survey. That would be the longest run of gains since May. All the respondents forecast a rise.
Gasoline inventories were probably unchanged and distillate fuels slid 1.5 million barrels, the survey shows.
The EIA, the Energy Department’s statistical arm, is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington. The industry-funded American Petroleum Institute will release separate supply data today.
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.
Cushing Stockpiles
A drop in supplies at Cushing, Oklahoma, the delivery point for New York crude, should cause the Brent-WTI spread to shrink to $7.50 a barrel in the second quarter, Goldman Sachs said in a report dated Feb. 10. Stockpiles at the storage hub climbed to a record 51.9 million barrels in the week ended Jan. 11, data from the EIA show. They were at 51.4 million in the seven days ended Feb. 1.
The Seaway pipeline will help shift surplus crude from Cushing to the U.S. Gulf Coast even after Enterprise Product Partners LP said Jan. 31 that capacity will be limited until late 2013, according to Goldman. New pipe capacity from the Permian Basin to the Gulf Coast this quarter will also reduce the glut, it said. The bank has predicted since April that the differential would narrow to $5 within three months and reiterated that forecast Aug. 16.
Majid al-Moneef withdrew his candidacy for the post of OPEC secretary-general after he was promoted within Saudi Arabia’s Supreme Economic Council, according to a Persian Gulf official with direct knowledge of the matter.
Al-Moneef, who formerly served as Saudi Arabia’s governor to the Organization of Petroleum Exporting Countries and as a senior economic adviser to Oil Minister Ali al-Naimi, was vying for the producer group’s top administrative position against candidates from Iran and Iraq. He dropped out of the contest yesterday, the person said, asking not to be identified because they aren’t authorized to speak to the media. The official didn’t say whether Saudi Arabia would propose another candidate.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Paul Gordon at pgordon6@bloomberg.net
