BLBG:Oil Climbs From Two-Day Low as Drop in U.S. Fuel Stockpiles Signals Demand
Oil advanced from a two-day low in New York as investors bet that shrinking fuel stockpiles in the U.S. indicate demand will increase in the world’s biggest crude- consuming nation.
Futures climbed as much as 0.7 percent after the industry- funded American Petroleum Institute said gasoline supplies fell the most in five months. An Energy Department report today may show gasoline and crude inventories slid last week. U.S. producer prices may have rebounded in July.
The drop in gasoline stockpiles is “price supportive, there’s no doubt about it, but I don’t think you can read too much into it at the moment,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, who predicts oil in New York will average $100 a barrel this year. “I’d prefer to see what the Energy Department come out with. The market will watch to see how we go with producer prices and the inventory data.”
Crude for September delivery rose as much as 61 cents to $87.26 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.85 at 10:57 a.m. Sydney time. The contract yesterday slipped 1.4 percent to $86.65, the lowest since Aug. 12. Prices are 15 percent higher the past year.
Brent oil for October settlement was at $109.27 a barrel, up 14 cents, on the ICE Futures Europe in London. The contract yesterday dropped 71 cents to $109.13. September oil, which expired yesterday, fell 0.4 percent to $109.47.
Fuel Supplies
Gasoline stockpiles fell 5.37 million barrels to 205.8 million last week, according to the report from the American Petroleum Institute. It was the biggest decline since the week ended March 18. Distillate supplies slid 1.29 million barrels.
U.S. crude-oil inventories rose 1.75 million barrels, the API data showed. An Energy Department report today may show crude supplies slipped 500,000 barrels and gasoline stockpiles dropped 1.2 million barrels, according to a Bloomberg News survey of analysts.
The API collects stockpile data on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed for its weekly survey. Oil-supply totals from the API and the department have moved in the same direction 71 percent of the time in the past year and 75 percent in the past four years.
The U.S. producer price index probably climbed 0.1 percent in July after declining 0.4 percent the prior month, according to the median estimate of analysts in a Bloomberg survey before a report today.
Tropical Storm Gert degenerated in the North Atlantic far from land, while Tropical Storm Fernanda gained strength in the eastern Pacific, the National Hurricane Center said.
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 in Singapore at akwiatkowsk2@bloomberg.net
