BLBG:WTI Oil Trades Near Two-Week High as U.S. Crude Supplies Decline
West Texas Intermediate oil traded near the highest level in two weeks after an industry report showed crude stockpiles fell for the first time since February in the U.S., the world’s largest user of the commodity.
Futures were little changed after climbing a fourth day yesterday, the longest run of gains since January. Crude supplies shrank by 1.38 million barrels last week, the American Petroleum Institute said. An Energy Department report today may show inventories rose by 2.3 million, according to a Bloomberg News survey. OPEC boosted its crude production to the highest in three months in February, led by increased output from Saudi Arabia and Iraq, a report from the producer group showed.
“The API figures provided mildly positive sentiment,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “This is a corrective rally, there’s been no real change in the bigger demand/supply picture that would suggest this was the beginning of any significant move.”
WTI for April delivery was at $92.66 a barrel, up 12 cents, in electronic trading on the New York Mercantile Exchange at 2:01 p.m. Singapore time. The volume of all futures traded was 15 percent below the 100-day average. The contract rose 48 cents to $92.54 yesterday, the highest close since Feb. 27.
Brent for April settlement on the London-based ICE Futures Europe exchange, which expires tomorrow, slid 25 cents to $109.40 a barrel. The more-actively traded May contract lost 23 cents to $109. The European benchmark grade was at a premium of $16.74 to WTI futures. It shrank for a fifth day yesterday to $17.11, the narrowest gap in six weeks.
Technical Momentum
WTI may extend gains in New York as a measure of technical momentum increases. The moving-average convergence divergence indicator is above its signal line today for the first time since Feb. 1, according to data compiled by Bloomberg. Investors typically buy contracts on a so-called bullish MACD crossover. Crude advanced from around $88 a barrel to above $98 over six weeks from mid-December after a similar chart pattern.
Prices have rallied from the 200-day moving average, at about $90.38 a barrel today, and may stall at around $95, the low reached in mid-February, said Spooner at CMC Markets.
The U.S. Energy Information Administration cut its 2013 forecast for WTI in its monthly Short-Term Energy Outlook yesterday. The crude will average $91.92 a barrel this year, down from a February estimate of $92.81, according to the Energy Department’s statistical unit.
Fuel Supplies
U.S. gasoline stockpiles dropped by 3.1 million barrels last week, the API data showed. They are forecast to decrease 1.2 million barrels in the government report, according to the median estimate of 11 analysts surveyed by Bloomberg. Distillate inventories, including heating oil and diesel, slid 2.2 million barrels in the API report compared with a projected 2 million barrel decline in the survey.
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 EIA for its weekly survey, which is scheduled to be released at 10:30 a.m. in Washington.
The Organization of Petroleum Exporting Countries pumped 30.3 million barrels a day last month, it said in its monthly Oil Market Report yesterday, citing secondary sources. That’s up from 30.2 million in January and is the highest since November. U.S. supplies will rise to an average 10.6 million barrels a day this year, the most since 1985, the 12-member group estimated.
India Talks
Saudi Arabia, Iraq and Kuwait, OPEC’s biggest producers, are in talks to ship extra crude to India as the nation prepares to halt purchases from Iran because of global sanctions, four people with knowledge of the matter said.
Indian refiners, which are waiting for an order from the oil ministry to stop buying Iranian cargoes, are discussing annual term contracts with the countries for the year starting April 1, the people said this week, asking not to be identified because the information is confidential.
South Sudan and Sudan agreed to order companies to resume southern oil shipments through a Red Sea export terminal within two weeks, more than a year after they were halted over a dispute about transportation fees, according to an agreement signed yesterday in Ethiopia’s capital, Addis Ababa. South Sudan’s production was 350,000 barrels a day before the shutdown, according to data compiled by Bloomberg.
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
