BLBG:Oil Trades Near One-Week High After U.S. Refiners Boost Crude Processing
Oil fluctuated near the highest level in more than a week after a U.S. government report showed refineries processed more crude last week while cutting imports. Brent’s premium to New York prices widened a second day.
Futures were little changed after advancing for a second day yesterday. Refineries operated at 83 percent of capacity, up 1 percentage point from the week before, the Energy Department said. Analysts projected there would be a 0.4 percentage point decrease. Gains were capped as Greek Prime Minister Lucas Papademos summoned the country’s lenders for further discussions today after failing to get full agreement on economic measures needed for a second aid package.
“Demand, particularly in the U.S., is still there,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity markets newsletter in Sydney. “We’ve been side-swiped by Europe in terms of its slowdown.”
Oil for March delivery was at $98.84 a barrel, up 13 cents, in electronic trading on the New York Mercantile Exchange at 2:49 p.m. Sydney time. The contract yesterday increased 30 cents, or 0.3 percent, to $98.71, the highest settlement since Jan. 30. Prices are 14 percent higher the past year.
Brent oil for March settlement was at $117.42 a barrel, up 22 cents, on the ICE Futures Europe exchange. The benchmark contract’s premium to New York-traded West Texas Intermediate was at $18.62, compared with $18.49 yesterday and a record $27.88 on Oct. 14.
Crude Inventories
U.S. crude inventories rose 304,000 barrels last week, according to the Department of Energy, compared with an estimated 2.5 million barrel gain in a Bloomberg News survey. Imports fell 5.3 percent.
Gasoline prices surged to the highest level in more than five months on speculation that refinery shutdowns in Europe and the U.S. will trigger a supply crunch. Gasoline for March delivery climbed 0.1 percent to $2.9778 a gallon on the New York Mercantile Exchange today. It rose 4.77 cents to $2.9752 a gallon yesterday, the highest settlement since Aug. 31 and the largest gain since Jan. 27.
Imports of the motor fuel dropped 32 percent last week, according to the Energy Department. Stockpiles rose 1.6 million barrels, compared with a forecast for an 875,000 barrel gain. Distillate inventories, a category that includes heating oil and diesel, increased 1.2 million barrels, compared with a projection for an 875,000 barrel decline.
Greek Debt
Greece’s government is struggling to arrange financing to meet a 14.5 billion-euro ($19.2 billion) bond payment on March 20, risking a collapse of the economy and a new round of contagion in the euro area. Political leaders have agreed on all the measures needed for a second international aid package except cuts to pensions, Panos Beglitis, a spokesman for the Pasok socialist party, told reporters in Athens.
Oil may extend its rally in New York as futures approach a “golden cross” formation on the daily technical chart, according to data compiled by Bloomberg. The 100-day moving average, at $94.43 a barrel today, has pared a discount to the 200-day mean to 24 cents, the smallest since mid-September. Investors tend to buy contracts when a shorter-term moving average rises above a longer-term one.
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
