BLBG:WTI Oil Trades Near Two-Day High Before Iranian Nuclear Talks
West Texas Intermediate oil traded near the highest level in two days before international talks with Iran on its nuclear program. China increased fuel prices for the first time since September.
Futures were little changed in New York after gaining 0.3 percent on Feb. 22. Iran, which is under a Western embargo on its oil exports, will meet the U.S., China, France, Germany, Russia and the U.K. tomorrow in Almaty, Kazakhstan, after an eight-month lapse in negotiations. Gasoline in China will rise by 300 yuan ($48) a metric ton and diesel by 290 yuan today, the National Development and Reform Commission said.
“Iran is still a significant producer and any major changes one way or the other to its production has the potential to have an impact on overall global supply,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney.
WTI for April delivery was at $93.26 a barrel, up 13 cents, in electronic trading on the New York Mercantile Exchange at 4:01 p.m. Singapore time. The contract rose to $93.13 on Feb. 22, the highest settlement since Feb. 20. The volume of all futures traded was 2 percent above the 100-day average. Front- month prices fell 2.9 percent last week, the most since December.
Brent oil for April settlement rose 26 cents to $114.36 a barrel on the London-based ICE Futures Europe exchange. The volume was 23 percent less than the 100-day average. The European benchmark crude was at a premium of $21.10 to WTI, from $20.97 on Feb. 22.
Iran Sanctions
Oil in New York has technical resistance along its 50-day moving average, around $93.62 a barrel today, according to data compiled by Bloomberg. Futures halted a rebound near this indicator on Feb. 22. Sell orders tend to be clustered close to chart-resistance levels.
Iran’s revenue from crude sales has declined because of the sanctions, President Mahmoud Ahmadinejad said in a speech aired on state television Feb. 23. The nation says its nuclear program is for civilian energy and medical research, while the U.S., the European Union, and other members of the United Nations Security Council suspect it has a covert atomic weapons program.
Recent discoveries of uranium resources have almost tripled Iran’s reserves of the radioactive fuel to 4,400 tons, the Islamic Republic News Agency reported Feb. 23, citing Fereidoon Abbasi, the head of the Atomic Energy Organization of Iran.
The Persian Gulf country is installing more advanced centrifuges that will multiply its uranium enrichment capability, the United Nations’ International Atomic Energy Agency reported last week, adding that it was unable to conclude that all material was intended for peaceful purposes.
China Fuel
“There’s not much sign there will be any advancement in the negotiations this week,” Robin Mills, the head of consulting at Dubai-based Manaar Energy Consulting and Project Management, said yesterday. “I’m not hopeful for any deal being reached in Kazakhstan. I haven’t seen any signs the U.S. will offer Iran any sanctions relief.”
The fuel-price increase by China, the world’s second- biggest oil consumer, reflects “recent” international crude costs, the NDRC said in a statement on its website yesterday. Brent, the benchmark price for more than half the world’s oil, has gained 2.9 percent this year. The pump price of 90-RON, China III gasoline in Beijing will rise 3.1 percent to 10,030 yuan a ton, or $4.60 a U.S. gallon, according to NDRC data.
Gasoline Prices
The average price for regular gasoline at U.S. pumps advanced 20.32 cents in the past two weeks to $3.795 a gallon, according to Lundberg Survey Inc. The survey covers the period ended Feb. 22 and is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company. The average has jumped 53.71 cents this year and is 10.33 cents higher than a year earlier.
China’s net exports of diesel jumped to the highest level in more than two years in January, according to data from the Beijing-based General Administration of Customs today. Overseas sales of the fuel exceeded imports by 309,273 tons, or 75,000 barrels a day, the most since October 2010, the data showed.
Hedge funds and other large speculators reduced bullish crude bets for the second time in three weeks as surging U.S. output boosted supplies. Money managers cut net-long positions, or wagers on rising prices, by 6.1 percent in the seven days to Feb. 19, the Commodity Futures Trading Commission’s Commitments of Traders report on Feb. 22 showed. That was the biggest drop since the week ended Dec. 11.
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
