BLBG:Oil Trades Near One-Week High on Bailout Optimism, U.S. Economy
Oil traded near the highest level in a week in New York on signs Germany may ease its resistance to a Spanish bailout and after industrial production rose more than forecast in the U.S., the world’s biggest crude consumer.
Futures were little changed after rising as much as 0.7 percent today. Two German lawmakers said the country is open to Spain seeking a precautionary credit line. Output at U.S. factories, mines and utilities rose 0.4 percent in September, twice as much as the median forecast of economists surveyed by Bloomberg News, data from the Federal Reserve in Washington showed yesterday.
“The proposal for a line of credit seems like a positive compromise,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “It may mean, as far as bondholders and the market are concerned, there’s a back-up facility there to be used. There was also a positive response to the U.S. industrial production figures, which were a little higher than expected.”
Crude for November delivery was at $92.40 a barrel, up 31 cents, in electronic trading on the New York Mercantile Exchange at 3:07 p.m. Singapore time. The contract yesterday rose 24 cents to $92.09, the highest settlement since Oct. 9. Prices are down 6.5 percent this year.
Brent oil for December settlement climbed 13 cents to $114.13 a barrel on the London-based ICE Futures Europe. November futures expired yesterday. The front-month European benchmark grade’s premium to the corresponding West Texas Intermediate contract was at $21.29 a barrel. It settled at $23.95 on Oct. 15, the widest gap since reaching a record on Oct. 14, 2011.
U.S. Stockpiles
The comments in Germany by Michael Meister, a deputy caucus leader of Chancellor Angela Merkel’s Christian Democratic coalition, and Norbert Barthle, a budget spokesman for her party, may signal a reversal of Finance Minister Wolfgang Schaeuble’s public position. Schaeuble cautioned Spain against seeking aid on top of its bank bailout as recently as last month.
The European Union accounted for 16 percent of the world’s oil consumption last year, according to BP Plc (BP/)’s Statistical Review of World Energy. The U.S. used 21 percent.
U.S. crude stockpiles rose 3.7 million barrels last week, data from the American Petroleum Institute showed yesterday. They are forecast to climb 1.5 million barrels, according to the median estimate of nine analysts in a Bloomberg survey before an Energy Department report today.
Gasoline inventories fell 1.2 million barrels, the API data showed. They are projected to rise 500,000 barrels in the government report. Distillate supplies, a category that includes diesel and heating oil, gained 1.8 million barrels, according to the API, compared with an estimated decline of 1.5 million in the survey.
Technical Resistance
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.
Oil’s advance in New York may stall along its middle Bollinger Band around $93.11 a barrel, according to data compiled by Bloomberg. Last week’s climb halted near this indicator, signaling technical resistance, where sell orders tend to be clustered.
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
