BLBG: Oil Is Near Three-Month High After Breaching $81 for First Time Since May
Oil traded near a three-month high after breaching $81 a barrel for the first time since May on expectations for improved economic prospects following gains in global equity markets.
Crude rose for a third day yesterday after the Institute for Supply Management’s U.S. manufacturing gauge fell less than forecast which helped spur the Standard & Poor’s 500 Index 2.2 percent higher. Asian equities today climbed. Oil supplies probably fell by 1.5 million barrels last week, a Bloomberg News survey showed before an Energy Department report tomorrow.
“The stock markets in Europe and the U.S. were finally able to push us over $80,” said Ken Hasegawa, a commodity derivative sales manager at broker Newedge in Tokyo. “We feel relatively more optimistic about the economy than we did three months ago.”
Crude oil for September delivery was at $81.40 a barrel, up 6 cents, in electronic trading on the New York Mercantile Exchange at 12:15 p.m. Singapore time. Yesterday, the contract rose $2.39, or 3 percent, to $81.34, the highest since May 4. Futures climbed 4.4 percent in July, the biggest monthly gain since March. Prices are up 2.6 percent this year.
The ISM’s manufacturing gauge fell to 55.5 in July from 56.2 a month earlier, the Tempe, Arizona-based group said. Economists had forecast the measure would drop to 54.5, according to the median of 74 projections in a Bloomberg News survey. Estimates ranged from 52.5 to 56.
The 16-nation euro region factory gauge increased to 56.7 from 55.6 in the previous month, data from London-based Markit Economics showed today. An index of purchasing managers in China slid to 49.4 from 50.4 in June, according to figures from HSBC Holdings Plc and Markit.
Equities Advance
“The manufacturing data out of the U.S. held above expectations,” said David Taylor, a market analyst at CMC Markets Ltd. in Sydney. “Last night saw a string of better- than-expected numbers lift confidence and encourage investors back into the market.”
The MSCI World Index, a gauge of equities in 24 developed nations, climbed 2.4 percent to the highest level since May 13.
The MSCI Asia Pacific Index gained 0.7 percent to 121.57 as of 11:21 a.m. in Tokyo, set for its highest close since May 5.
U.S. gasoline inventories probably declined 1 million barrels from 222.2 million the prior week, according to the survey. It would be the first drop since June 18.
Distillate Stockpiles
Stockpiles of distillate fuel, a category that includes heating oil and diesel, probably rose 1 million barrels from 167.5 million, the survey showed.
The Energy Department is scheduled to release its weekly report at 10:30 a.m. on Aug. 4 in Washington. The industry- funded American Petroleum Institute’s numbers will be made available at 4:30 p.m. local time today.
Brent crude for September settlement rose as much as 26 cents, or 0.3 percent, to $81.08 a barrel on the London-based ICE Futures Europe exchange, and was at $80.87 at 12:15 p.m. Singapore time. Yesterday, the contract gained $2.64, or 3.4 percent, to $80.82.
A tropical depression formed yesterday in the middle of the Atlantic Ocean, the National Hurricane Center said. The system has maximum sustained winds of 35 miles (56 kilometers) per hour, 4 mph less than the threshold to be declared a tropical storm and given a name, according to a bulletin released at 11 p.m. Miami time yesterday. It is moving west-northwest at 23 mph.
August and September are the most active months of the Atlantic hurricane season. Storms can threaten states along the U.S. Gulf of Mexico which account for 31 percent of U.S. oil output and 43 percent of the country’s refining capacity.
