BLBG:Crude Trades Near Two-Day Low in New York; Brent Futures Advance in London
Oil fell for a second day in New York as speculation Europe will struggle to contain its debt crisis countered signs of declining fuel stockpiles in the U.S., the world’s largest crude consumer. Brent rose in London.
West Texas Intermediate oil slipped, extending a 0.9 percent drop yesterday, as Italy’s borrowing costs climbed, deepening concern that Europe’s turmoil is worsening. U.S. crude inventories probably shrank for a second week, according to a Bloomberg News survey before an Energy Department report tomorrow. Hedge funds raised bullish bets on oil the most since May, a Commodity Futures Trading Commission report showed.
“Crude has been suffering from renewed recession fears in the Euro-zone and strong gains in the dollar index,” said Andrey Kryuchenkov, a London-based analyst at VTB Group who predicts Brent prices will end the year close to current levels. “Fears over the ongoing debt crisis are still dominating headlines. The situation will not go away overnight.”
Crude for December delivery was at $97.71 a barrel, down 43 cents, in electronic trading on the New York Mercantile Exchange at 9:30 a.m. London time. Prices have risen in the last six weeks, the longest run of gains since April 2009.
Brent for December settlement, which expires today, was up 25 cents, or 0.2 percent, at $112.14 a barrel on the ICE Futures Europe exchange. The more actively traded January contract climbed 22 cents to $111.50.
The European benchmark crude was $14.59 a barrel higher than New York futures, after ending yesterday at a $13.75 premium, the lowest since May 25. The spread is down 48 percent from a record $27.88 on Oct. 14.
Moving Average
Oil in New York has rallied 29 percent since settling at a one-year low of $75.67 a barrel on Oct. 4. Futures have technical support along the 200-day moving average, said Ken Hasegawa, a commodity-derivatives trading manager at Newedge Group in Tokyo. The indicator was at $95.15 today, based on data compiled by Bloomberg. Buy orders tend to be clustered near chart-support levels.
Hedge funds and other large speculators raised bullish bets on oil the most since May in the week ended Nov. 8, a Commodity Futures Trading Commission report showed yesterday. Wagers on rising prices increased 7.2 percent to 203,965 futures and options combined, the CFTC’s Commitments of Traders data showed.
Price Spike
“We cannot find the sudden, sharp decline in global oil supplies, nor the sudden, sharp increase in global demand that warrants the spike in oil prices,” Stephen Schork, president of The Schork Group Inc., a consultant in Villanova, Pennsylvania, said in an e-mailed report.
U.S. crude stockpiles probably decreased 1 million barrels, or 0.3 percent, in the week to Nov. 11, according to the median estimate of 11 analysts surveyed by Bloomberg News before tomorrow’s Energy Department report. Supplies slid 1.4 million barrels to 338.1 million the prior week.
Gasoline inventories are expected to have dropped 1 million barrels, the survey showed. Stockpiles previously fell to 204.2 million, the lowest since June 2009, as imports and refinery output declined. Stockpiles of distillate fuels, which include heating oil and diesel, may decline for a seventh week, the survey showed.
The industry-funded American Petroleum Institute in Washington will release its supply data today.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
