BLBG:Crude Oil Trades Near One-Week Low in New York as U.S. Stockpiles Increase
Oil traded near a one-week low as an unexpected gain in inventories indicated demand is recovering slowly in the U.S., the world’s biggest crude consumer.
Futures were little changed in New York after dropping yesterday for the first time in four days. The Energy Department said U.S. crude stockpiles rose by 1.34 million barrels last week. Analysts had forecast a decline of 1.25 million barrels. Gasoline supplies climbed almost six times more than projected. The European Central Bank will meet today in Frankfurt and the region’s leaders will convene in Brussels to discuss measures to deal with the sovereign debt crisis.
“Everyone is waiting for the ECB meeting and the summit today and tomorrow,” Ken Hasegawa, a commodity sales manager at broker Newedge Group in Tokyo. “There is still a lot of concern. Therefore there isn’t a situation to make a lot of long positions on oil.”
Crude for January delivery was at $100.51 a barrel, up 2 cents, in electronic trading on the New York Mercantile Exchange at 11:30 a.m. in Singapore. It fell 0.8 percent yesterday to $100.49, the lowest settlement since Dec. 1. Prices are 10 percent higher this year after climbing 15 percent in 2010.
Brent oil for January settlement was at $109.52 a barrel, down 1 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $8.96 a barrel, compared with $9.04 yesterday and a record $27.88 on Oct. 14.
A positive outcome at the European meetings is likely to put “a solid floor” of $95 a barrel under WTI prices, Hasegawa said. He predicts that oil will have more “upside” next year.
Fuel Supplies
“There is little U.S. support for the oil complex,” Michael Wittner, the head of oil-market research at Societe Generale SA in New York, said in an e-mailed note today.
U.S. gasoline supplies increased by 5.15 million barrels to 215 million last week, the highest level since July, the Energy Department report showed. They were forecast to climb 875,000 barrels, according to the median of 12 analysts surveyed by Bloomberg News.
Inventories of distillates, a category that includes heating oil and diesel, gained 2.53 million barrels to 141 million, the Energy Department report shows. They were projected to advance 1.15 million barrels, according to the survey.
Imports of crude oil climbed by 375,000 barrels to 9.44 million, the most since September. Fuel imports advanced 345,000 barrels a day to 2.65 million, the greatest since June.
Oil in New York has technical support at $99.60 a barrel, near where futures halted yesterday’s decline, according to data compiled by Bloomberg. That’s the 61.8 percent Fibonacci retracement of the drop to this year’s intraday low in October from the high in May. Buy orders tend to be clustered near chart-support levels.
OPEC Meeting
The oil market will be adequately supplied “only if OPEC members keep producing at current levels of 30 million barrels day,” Nobuo Tanaka, who ended a four-year term as executive director at the IEA in September, said yesterday in Doha, Qatar. Tanaka was referring to crude output from the Organization of Petroleum Exporting Countries, which meets Dec. 14 in Vienna.
The group is likely to maintain its current production quotas when it meets, Hasegawa said. “Saudi said it’s already producing 10 million barrels a day,” he said. “That is a very big volume and that means they can adjust for any disappeared volume from Libya.”
Saudi Arabia, the largest member of OPEC, said the country boosted output last month to the most in more than three decades to meet customer demand.
“We produced 10 million and 40 barrels in November because that’s what the customers wanted,” Ali al-Naimi said on Dec. 6. That’s the highest level since at least 1980, according to data from the U.S. Energy Department. The nation pumped 9.4 million barrels a day in October, al-Naimi said on Nov. 20. “I think oil at this level around $100 a barrel might be very comfortable for producers and consumers,” Hasegawa said.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Ann Koh in Singapore at akoh15@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
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