West Texas Intermediate crude rose for a third day as speculation the Federal Reserve will maintain economic stimulus boosted the demand outlook in the U.S., the world’s biggest oil user. Brent’s premium to WTI narrowed. Futures advanced as much as 0.9 percent in New York. Purchases of newly built U.S. homes fell the most in more than three years last month, according to the Commerce Department. Brent’s premium shrank a third day as Libya resumed exports from the port of Brega. Tropical Storm Fernand moved inland from the Bay of Campeche where Petroleos Mexicanos, Mexico’s state-owned oil company, has most of its output. “One of the drivers is the weaker than anticipated new home sales, which does impact on the outlook of timing for Fed tapering,� said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “West Texas remains in a well-defined technical range, and the resistance for that is at about $108� a barrel, he said. WTI for October delivery climbed as much as 95 cents to $107.37 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.81 at 3:03 p.m. Singapore time. The contract increased 1.3 percent to $106.42 on Aug. 23, the largest gain since Aug. 9. Prices are up 16 percent in 2013. Brent for October settlement advanced as much as 64 cents, or 0.6 percent, to $111.68 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $4.36 to WTI. The spread narrowed for a second day on Aug. 23 to $4.62. Libyan Output Sales of newly built U.S. homes fell 13.4 percent to an annual pace of 394,000 in July, Commerce Department data showed Aug. 23. A decrease to 487,000 was projected, according to the median estimate in a Bloomberg survey. Last month’s decline was the biggest since May 2010. Libya’s oil exports resumed from Brega, one of four ports where force majeure was declared amid protests that shut the facilities since the end of July, said officials in Tripoli. This may add about 90,000 barrels a day to current shipments of 500,000 barrels a day from the nation, a member of the Organization of Petroleum Exporting Countries. Tropical Storm Fernand made landfall over the Mexican state of Veracruz, the U.S. National Hurricane Center said in an advisory. It was forecast to head west-northwest on a path over central Mexico away from oil installations, according to the center’s forecast. Atlantic storms are followed closely by energy companies and commodity traders because they can disrupt natural gas and oil production and processing and destroy crops. Syria Risk The U.S. concluded Syrian President Bashar al-Assad’s regime probably used chemical weaponry against civilians, calling an agreement yesterday to let United Nations inspectors review the area not credible. “There is an increased risk level now to the extent that Western nations may feel the need to take some action� on Syria, said Spooner at CMC Markets. The Middle East accounted for 35 percent of global oil output in the first quarter of this year, International Energy Agency data show. Money managers reduced net-long positions in WTI crude, or wagers that prices will increase, by 2 percent to 302,762 futures and options combined in the seven days ended Aug. 20, according to the Commodity Futures Trading Commission’s weekly report on Aug. 23. 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

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