BLBG:Oil Rebounds From Seven-Week Low on Forecast Gain in U.S. Jobs
Oil rebounded from a seven-week low in New York before a government report forecast to show that payrolls rose for a fourth month in the U.S., the world’s biggest crude-consuming nation.
Futures advanced as much as 0.7 percent for the first gain in three days after a technical indicator signaled prices may have fallen too far. They dropped 2.4 percent yesterday, leaving West Texas Intermediate futures at the biggest discount to London-traded Brent crude in more than five months. Payrolls in the U.S. probably rose by 205,000 last month, according to Bloomberg survey before the Labor Department report tomorrow.
“We’ve hit that support, and we may be bouncing back to maintain the trading range we’ve seen in very broad terms of between $103 a barrel to $108.50,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “The spread between Brent and West Texas continues to blow out. Firmer prices for the European contract suggests there’s still supply concerns.”
Oil for May delivery gained as much as 76 cents to $102.23 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.18 at 1:03 p.m. Sydney time. The contract fell $2.54 yesterday to the lowest close since Feb. 14. Prices are down 0.8 percent since March 30, putting crude on track for its fourth weekly decline.
Brent oil for May settlement advanced 59 cents, or 0.5 percent, to $122.93 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded West Texas Intermediate was at $20.74, compared with $20.87 yesterday, the most since Oct. 21.
Bollinger Band
New York crude may rebound because its decline was halted as it traded near its lower Bollinger Band of around $101.74 a barrel, according to data compiled by Bloomberg. Buy orders tend to be clustered close to chart-support levels.
Applications for initial jobless benefits probably fell by 4,000 last week to 355,000, according to a Bloomberg News survey before a Labor Department report today. The jobless rate probably held at a three-year low of 8.3 percent, a separate report will probably show tomorrow.
Prices slipped yesterday after government figures showed U.S. crude supplies climbed the most since 2008. They increased by 9.01 million barrels last week to 362.4 million, an Energy Department report showed. They were forecast to increase 2.5 million barrels, according to the median of 11 analyst estimates in a Bloomberg News survey.
Gasoline supplies fell 1.46 million barrels, Energy Department data showed. They were projected to drop 1.4 million barrels, according to the survey. Inventories of distillates, a category that includes diesel and heating oil, rose by 19,000 barrels compared with an estimate for a 500,000 gain.
Brent futures are being supported as physical supplies of the Dated Brent grade, which are the basis for the contract, have been curtailed following the shutdown of the Elgin and Franklin fields in the North Sea after a gas leak on March 25. The wells provide about 15 percent of the Forties blend, one of the four crudes used to price the Brent stream.
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 at akwiatkowsk2@bloomberg.net
