BLBG: Oil Rises From Eight-Week Low as ECB Signals Spanish Aid
Oil climbed from an eight-week low in New York as a European Central Bank official signaled the lender may act to stem the spread of the region’s debt crisis.
Futures rose as much as 0.7 percent and the euro gained against the dollar after ECB Executive Board member Benoit Coeure suggested that the bank may restart bond purchases for Spain. U.S. supplies increased by 6.58 million barrels last week, the American Petroleum Institute said yesterday. The Energy Department will report on stockpiles today.
“The dollar came under pressure and oil rose after an ECB official hinted that the bank may purchase Spanish bonds,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “I’m surprised we’re up at all after the pretty bearish numbers last night. If the government data confirms the supply build, we’ll probably head for new lows.”
Crude oil for May delivery rose 27 cents, or 0.3 percent, to $101.29 a barrel at 9:01 a.m. on the New York Mercantile Exchange. The contract yesterday fell 1.4 percent to $101.02, the lowest settlement since Feb. 14. Prices are up 2.5 percent this year.
Brent oil for May settlement declined 40 cents, or 0.3 percent, to $119.48 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $18.19 to New York futures. The spread narrowed $1.35 yesterday to $18.86.
Spain’s Deficit
Europe’s shared currency advanced against the dollar amid speculation that an ECB bond-purchase program may cut Spain’s borrowing costs. Prime Minister Mariano Rajoy’s three-month-old government is struggling to convince investors it can reduce the budget deficit. The euro rose as much as 0.6 percent to $1.3157, making commodities priced in dollars less expensive.
“Oil is getting some support from a weaker greenback amid some ECB reassurances,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “We also have a general rebound across the board along with equities after losses yesterday, though it seems this may be short-lived.”
The Energy Department report will probably show that stockpiles climbed 2 million barrels in the seven days ended April 6, according to the median estimate of 10 analysts surveyed by Bloomberg.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey. Its data will be release at 10:30 a.m. Washington time.
To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
