BLBG:Oil Rises a Second Day on U.S. Economic Outlook, Saudi Output
Oil advanced for a second day in New York as investors bet that a U.S. economic recovery and Saudi Arabian crude output near the strongest level since at least 1980 signals fuel demand is increasing.
Futures gained as much as 0.4 percent after climbing the most in more than three weeks on March 16. Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, pumped 9.87 million barrels a day in January, according to data submitted to the Joint Organization Data Initiative. Reports this week may show the economy strengthening in the U.S., the world’s biggest crude consumer.
“We’re looking at a period of moderate growth in the U.S., and the outlook has picked up,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney who sees West Texas Intermediate crude trading in a range of about $104 a barrel to $108 a barrel. “If it continues on from here up into $108 plus in terms of the New York price, that would start to look as though it was making a bit more of a positive statement in terms of breaking resistance from a technical point of view.”
Oil for April delivery increased as much as 42 cents to $107.48 a barrel in electronic trading on the New York Mercantile Exchange and was at $107.37 at 1:30 p.m. Singapore time. The contract, which expires tomorrow, climbed 1.9 percent to $107.06 a barrel on March 16, the highest close since March 9. The more active May future rose 31 cents to $107.89 a barrel today. Prices are up 8.7 percent this year.
Brent oil for May settlement was at $125.91 a barrel, up 10 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $18.53 to New York futures for the same month.
‘Bumpy Ride’
Oil prices will have a “bumpy ride in the months ahead” because of a “slim buffer” of spare crude-production capacity, the International Energy Agency said in its monthly market report on March 14. World oil supplies are “tight” with spare capacity at about 2.5 million barrels a day compared with 3.5 million in 2008 to 2010, U.S. Deputy Secretary of Energy Daniel Poneman said the same day.
Saudi Arabia’s January crude output rose 0.6 percent from December and compares with 10.05 million barrels a day in November. The U.S. Energy Department said November’s rise was the largest in at least 31 years.
Oil exports from Saudi Arabia climbed 2 percent in January to 7.5 million barrels a day, the JODI data show. Shipments by Iran, OPEC’s second biggest producer, increased to 2.3 million barrels a day, the highest since December 2008. JODI is supervised by the Riyadh-based International Energy Forum and compiles data provided by member governments.
Home Improvement
Home purchases in the U.S. probably rose in February to the highest level in almost two years, a sign of stabilization in the real-estate market, according to Bloomberg News surveys of economists before reports this week.
Hedge funds decreased oil wagers on rising prices by 6,188, or 2.5 percent, to 258,406 contracts in the seven days ended March 13, according to the Commodity Futures Trading Commission’s Commitments of Traders report.
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
