BLBG:Oil Trades Near 5-Month High Above $102 as Supplies Counter Debt Concern
Oil pared losses in New York to trade near the highest in more than five months as signs of shrinking stockpiles in the U.S. countered concern that Europe’s debt crisis will damp fuel demand.
Futures were little changed after closing above $102 a barrel yesterday. U.S. crude inventories declined for a second week, according to the Energy Department. Oil surged yesterday after Enbridge Inc. said it will reverse the direction of the Seaway pipeline, adding an outlet to transport from the central U.S. and Canada to the coast of the Gulf of Mexico. A rise in Spanish and Italian bond yields has stoked speculation Europe is failing to contain its debt crisis.
“The market should oscillate around $100 for a while,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, who sees resistance to prices at $102. “Overhanging the market is the concern that this contagion in Europe will continue to flare up.”
Crude for December delivery was at $102.68 a barrel in electronic trading on the New York Mercantile Exchange, up 9 cents, at 2:57 p.m. Singapore time. The contract earlier fell as much as 97 cents. Yesterday, it climbed $3.22 to $102.59, the highest since May 31. Prices have gained 12 percent this year, after increasing 15 percent in 2010.
Brent oil for January settlement on the London-based ICE Futures Europe exchange was at $111.76 a barrel, down 12 cents. The European contract was $8.99 higher than West Texas crude, the smallest premium since March 8. The spread is down 67 percent from a record $27.88 on Oct. 14.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Yee Kai Pin in Singapore at kyee13@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
