BLBG:WTI Crude Rebounds; Set for Biggest Weekly Drop Since December
West Texas Intermediate rebounded from the lowest level since December, trimming the largest weekly decline in more than two months. U.S. crude stockpiles increased a fifth week, the longest stretch of gains since May.
Futures rose as much as 0.6 percent. Crude inventories climbed 4.1 million barrels last week, the most in three weeks, according to data from the Energy Information Administration, the Energy Department’s statistical unit. They were forecast to gain 2 million barrels, based on a Bloomberg News survey of analysts. U.S. oil production advanced to the highest since 1992, the report showed.
“We saw a bit of a rebound off that dramatic fall, but the direction is still down,” said Jeremy Friesen, a commodity strategist at Societe Generale SA in Hong Kong. “With the lack of any significant news, we’re seeing a bit of squaring of positions. It’s a dead-cat bounce.”
WTI for April delivery rose as much as 52 cents to $93.36 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.22 at 2:25 p.m. Singapore time. The contract fell to $92.84 yesterday, the lowest front-month settlement price since Dec. 31. The volume of all futures traded was 36 percent above the 100-day average. Prices are down 2.9 percent this week and set for the second weekly drop in three.
Brent crude for April settlement on the London-based ICE Futures Europe exchange climbed as much as 0.6 percent to $114.19 a barrel. It fell $2.07 to $113.53 yesterday. The volume was 23 percent higher than the 100-day average. The European benchmark grade was at a premium of $20.98 to WTI. The gap expanded to $23.18 on Feb. 8, the widest since Nov. 26.
Crude Supplies
U.S. crude stockpiles rose to 376.4 million barrels, the highest since July, according to the Energy Department. Supplies at Cushing, Oklahoma, the delivery point for WTI, were up 417,000 barrels to 50.7 million, the report showed.
Gasoline inventories decreased 2.9 million barrels last week, the Energy Department said. They were projected to fall 900,000 barrels in the Bloomberg survey. Distillate stockpiles, including heating oil and diesel, slid 2.3 million barrels, compared with a forecast 1.8 million decline.
The rally in crude prices earlier this month was driven by renewed optimism in economic growth rather than “hard demand data,” according to Goldman Sachs Group Inc. Brent prices reached a 2013 high of $118.90 a barrel on Feb. 8.
“The current sell-off in oil is bringing prices more in line with the underlying fundamentals,” Jeffrey Currie, the bank’s head of commodities research in New York, said in a report e-mailed today.
Price Outlook
WTI may fall next week as slowing demand boosts inventories, a separate Bloomberg News survey showed. Twenty of 30 analysts and traders, or 67 percent, forecast crude will drop through March 1. Five respondents, or 17 percent, predicted a gain. Five said there would be little change. Last week, 48 percent of those surveyed projected a decrease.
Oil in New York may decline after breaching support at the 50-day moving average, according to a technical analysis by Bill Baruch, a senior market strategist at Iitrader.com in Chicago. The April contract may move toward the 200-day moving average around $92.22 a barrel, he said. It settled yesterday below the 50-day mean for the first time since Dec. 18.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Ramsey Al-Rikabi in Singapore at ralrikabi@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
