BLBG: Crude Oil Futures Trade Near One-Month High as Demand Improves
Oil rose, trading near the highest in a month, as stronger equities markets and declining U.S. gasoline supplies increased speculation that fuel demand may improve.
Oil rose as European stocks climbed for the first time in five days. Gasoline stockpiles declined 3.32 million barrels to 215.3 million barrels last week, the Energy Department said in a report yesterday. Consumption averaged 9 million barrels a day over the past four weeks, up 1.7 percent from a year earlier, as pump prices fell.
“The market is consolidating after last night’s gains on the back of a fairly bullish U.S. fuel inventories report,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “Risk sentiment has improved, with gains in global equities also supporting the market.”
Crude oil for April delivery climbed as much as 61 cents, or 1.4 percent, to $43.11 a barrel on the New York Mercantile Exchange. It traded at $43.06 at 9:33 a.m. in London.
Yesterday, the contract rose $2.54, or 6.4 percent, to $42.50 a barrel, the highest settlement since Jan. 26. Prices have fallen 58 percent in the past 12 months.
Brent crude oil for April settlement rose as much as 1.5 percent to $44.95 a barrel on London’s ICE Futures Europe exchange and traded at $44.71 a barrel at 9:34 a.m. local time.
“Commodities have a high correlation with equities at the moment,” said Bayram Dincer, a Dresdner Bank commodity analyst in Zurich. “Expectations for a bottoming in equities and higher prices in the midterm are giving some hope to commodities.”
Refinery Rates Fall
Europe’s Dow Jones Stoxx 600 Index climbed 1.2 percent to 174.35 at 9:39 a.m. in London, rebounding from a six-year low. Futures on the Standard & Poor’s 500 Index added 1.5 percent.
U.S. refineries operated at 81.4 percent of capacity, down 0.9 percentage point from the week before, the Energy Department said. Plants are running at the lowest rate since the week ended Oct. 3, when the Gulf Coast was recovering from Hurricanes Gustav and Ike. Rates were forecast to drop by 0.1 percentage point.
Inventories of crude oil rose 717,000 barrels to 351.3 million barrels, the department said. Supplies were forecast to increase by 1.25 million barrels.
Oil supplies at Cushing, Oklahoma, where New York-traded West Texas Intermediate crude is delivered, declined 358,000 barrels to 34.5 million barrels, the report showed. Stockpiles in the week ended Feb. 6 were the highest since at least April 2004, when the department began keeping records for the location.
