BS:Crude Trades Near One-Week High After China Cuts Reserve Ratio
By Grant Smith
Nov. 30 (Bloomberg) -- Oil traded near its highest in a week in New York, erasing losses after China reduced the amount of cash that banks must set aside as reserves for the first time since 2008.
West Texas Intermediate futures have gained 7.3 percent in November, their second monthly increase. The People’s Bank of China cut its reserve requirement ratio today for lenders by 0.5 percentage point with effect from Dec. 5. Crude earlier fell as much as 0.9 percent after data from the American Petroleum Institute yesterday showed U.S. crude inventories climbed by 3.44 million barrels last week. The Energy Department will release its own report later today.
“China’s decision falls in line with selective monetary policy easing,” said Harry Tchilinguirian, the London-based head of commodity markets strategy at BNP Paribas SA. “The scenario of a soft landing in the Chinese economy, with a potential re-acceleration next year, takes on a greater probability of realization, which in turn is supportive of global oil demand.”
Crude for January delivery was up 29 cents at $100.08 a barrel in electronic trading on the New York Mercantile Exchange at 12:06 p.m. London time.
Brent oil for January settlement was down 41 cents, or 0.4 percent, at $110.41 a barrel on the London-based ICE Futures Europe exchange, narrowing an earlier drop of 1.1 percent. It closed yesterday up 1.7 percent at $110.82.
The European benchmark contract’s premium to New York’s West Texas Intermediate was at $10.32 a barrel, compared with yesterday’s close of $11.14 and a record $27.88 on Oct. 14.
U.S. Inventories
Prices rose in New York and London yesterday after U.S. consumer confidence climbed the most in more than eight years and Iranian protesters vandalized the British Embassy’s compound in Tehran. The U.S. approved additional curbs on Iran’s banking system and oil industry on Nov. 21, hoping to thwart the country’s nuclear program, and the European Union may follow.
U.S. crude inventories rose to 339.2 million barrels as imports surged 10 percent in the week to Nov. 25, the API report showed. An Energy Department report today will probably show supplies increased 50,000 barrels, according to the median of responses to a Bloomberg News survey.
Gasoline stockpiles slipped 173,000 barrels to 209.4 million, according to the API. Distillate fuels, including diesel and heating oil, gained 1.35 million barrels to 139.5 million. Oil-product imports rose 8.5 percent, the group said.
Analysts in the Bloomberg survey predicted the Energy Department will say motor-fuel supplies climbed 1.45 million barrels while distillates declined 1.25 million. The department is scheduled to release its inventory data today at 10:30 a.m. in Washington.
“We’re at the start of winter now with some oil supplies at little bit tight, and some positive macro data in the U.S.,” said Gerrit Zambo, a trader at Bayerische Landesbank in Munich who correctly predicted crude’s slump in September.
--Editors: John Buckley, Raj Rajendran
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: John Buckley at johnbuckley@bloomberg.net
