BLBG:WTI Oil Heads for First Weekly Gain in Three; Brent System Opens
West Texas Intermediate oil headed for the first weekly gain in three weeks. Brent crude’s premium to New York futures narrowed as a North Sea pipeline network resumed five days after it was shut because of a leak.
WTI was little changed after rising 1.3 percent yesterday, the most in more than three weeks, as U.S. jobless claims fell to a six-week low. Data today will probably show the U.S. added more jobs in February, according to a Bloomberg survey of economists. Oil may drop next week as weaker demand from refineries boosts U.S. inventories, a separate survey showed. The North Sea Brent pipeline system resumed pumping yesterday after an unplanned halt on March 2, according to Abu Dhabi National Energy Co. (TAQA) PJSC, the operator known as Taqa.
“There could be another round of bidding up of prices if the employment data in the U.S. today is positive,” said Takashi Hayashida, chief executive officer of Elements Capital Inc., a Tokyo-based commodities-trading company. “At some point within a week or two, there could be some selling off. A lot of people bought speculatively, it wasn’t fundamentally driven.”
WTI for April delivery was at $91.35 a barrel, down 21 cents, in electronic trading on the New York Mercantile Exchange at 1:32 p.m. Singapore time. The volume of all futures traded was 33 percent below the 100-day average. The contract rose $1.13 to $91.56 yesterday, the biggest gain since Feb. 11 and the highest close since Feb. 28. Prices are up 0.7 percent this week.
Brent for April settlement fell 32 cents to $110.83 a barrel on the London-based ICE Futures Europe exchange after gaining 9 cents yesterday. The European benchmark grade was at a premium of $19.48 to WTI futures, narrowing a third day.
Brent System
Taqa started restoring the flow “of an estimated 80,000 barrels a day of crude” to the North Sea Brent pipeline, it said in an e-mailed statement yesterday. The network has daily capacity for about 90,000 barrels. The company didn’t specify when operations resumed at the system, which accounts for about 10 percent of U.K. oil production, nor did it say when it would reach the targeted flow.
Applications for unemployment insurance in the U.S., the world’s biggest crude consumer, slid by 7,000 to 340,000 in the week ended March 2, the Labor Department said yesterday. Employers added 165,000 workers in February after a 157,000 increase a month earlier, the Bloomberg survey showed before today’s jobs data.
“WTI crude oil prices rose amid the stronger than expected U.S. jobless claims data, but the restart of a North Sea pipeline limited a rally in Brent,” Australia & New Zealand Banking Group Ltd. (ANZ) analysts including Mark Pervan and Natalie Rampono said in a note today. “The U.S. non-farm payrolls figure tonight will set market sentiment and drive WTI prices.”
Technical Rebound
Oil in New York rebounded after reaching an upward-sloping trend line on the weekly chart, signaling technical support, according to data compiled by Bloomberg. This line, connecting the lows of June and December 2012, is around $89.66 next week.
OPEC will boost shipments this month in anticipation of a rebound in demand as refiners in the U.S. and Europe finish maintenance, according to Oil Movements, a tanker tracker. The Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s crude, will bolster daily shipments by 420,000 barrels to 23.83 million in the four weeks to March 23, Oil Movements said yesterday in an e-mailed report. Most of the increase is coming from Saudi Arabia, OPEC’s largest member. The figures exclude Angola and Ecuador.
WTI to Fall
Seventeen of 37 analysts and traders, or 46 percent, forecast WTI will decrease through March 15, according to the Bloomberg survey. Thirteen respondents, or 35 percent, predicted a gain. Seven said there would be little change. Last week, 57 percent of analysts projected a decrease.
The utilization rate for U.S. refineries decreased to 82.2 percent last week, the lowest level since March 2012, and crude stockpiles climbed to an eight-month high, according to data March 6 from the Energy Information Administration, the Energy Department’s statistical arm.
China’s net crude imports in February fell to 5.42 million barrels a day, the lowest level in five months, according to figures released on the website of the Beijing-based General Administration of Customs today. The nation’s appetite for oil eased as some refineries prepared to start scheduled maintenance this month. China is the world’s second-biggest crude consumer.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
