BLBG: Oil Rises, Snapping Three Days of Decline, on Stock Market Gain
July 15 (Bloomberg) -- Crude oil rose, snapping three days of declines, as share markets advanced and an industry report showed a drop in gasoline stockpiles in the U.S., the world’s largest energy consumer.
Oil climbed from an eight-week low after the industry- funded American Petroleum Institute yesterday said gasoline inventories fell 69,000 barrels last week. Asian stocks gained for a second day after U.S. stocks advanced on stronger-than- estimated retail sales, bolstering hopes a recovering economy will increase fuel demand.
“What we saw overnight was a return to some risky assets, so it’s not just oil that’s getting some support,” said Yingxi Yu, a commodities analyst at Barclays Capital in Singapore. “It’s also equity markets and other parts of the commodities sector.”
Crude oil for August delivery gained as much as $1.08, or 1.8 percent, to $60.60 a barrel on the New York Mercantile Exchange. The contract traded at $60.47 at 2:39 p.m. Singapore time. Yesterday, it declined to $59.52, the lowest settlement since May 18. Prices have fallen 59 percent from a record $147.27 reached on July 11, 2008.
The MSCI Asia Pacific Index added 0.9 percent to 101.37 at 3:19 p.m. in Tokyo. The gauge has rallied 44 percent from a more than five-year low on March 9 amid optimism government stimulus policies will revive the global economy. The Standard & Poor’s 500 Index yesterday added 0.5 percent and the Dow Jones Industrial Average rose 0.3 percent.
“We are starting to see index-fund buying on the loose connection between higher equities and an assumption that oil demand will grow,” Peter Beutel, president of Cameron Hanover in New Canaan, Connecticut, said in a note to clients.
Gasoline Stockpiles
A report today from the Energy Department may show that stockpiles gained for a fifth week, according to analysts surveyed by Bloomberg News. The Energy Department report will probably show gasoline inventories rose 875,000 barrels in the week ended July 10, according to the median of 14 responses in the Bloomberg News survey. The department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. in Washington.
“The expectation is that U.S. gasoline demand has been weak post-July 4, and demand hasn’t been robust,” said Victor Shum, a senior principal at consultant Purvin & Gertz Inc. in Singapore. “Traders would treat the API report with some caution.”
Stocks of distillate fuel, a category that includes diesel and heating oil, probably rose 2 million barrels last week, the survey showed. Distillate fuel inventories increased 3.74 million barrels to 158.7 million in the week ended July 3, the highest since January 1985, according to the department.
Crude Inventories
Crude inventories fell 1.6 million barrels to 346.8 million last week, the API report showed. Stockpiles probably declined 2.1 million barrels, according to the survey.
The API collects stockpile data on a voluntary basis from operators of refineries, bulk terminals and pipelines.
Nigeria’s main rebel group, the Movement for the Emancipation of the Niger Delta, declared a 60-day cease-fire in its local campaign targeting oil and gas installations after authorities freed leader Henry Okah. The cease-fire, which came into force at midnight local time, had no immediate impact on the oil market.
Gasoline for August delivery gained 2.24 cents, or 1.4 percent, to $1.6690 a gallon in New York. Yesterday, the contract rose 0.4 percent to $1.6466.
Brent crude for August settlement rose as much as $1, or 1.6 percent, to $61.86 on London’s ICE Futures Europe Exchange, and traded at $61.71 at 2:40 p.m. Singapore time. The contract expires tomorrow.
