BLBG:Oil Rises From Two-Week Low; Keystone Pipeline Planned to Start
Oil rebounded from the lowest close in almost two weeks in New York on speculation last week’s losses were excessive. TransCanada Corp. planned to start its Keystone pipeline today after a second delay.
Futures climbed as much as 0.6 percent after reaching technical support levels. Prices also advanced after the White House denied a New York Times report that administration officials agreed to one-on-one talks with Iran’s government over its nuclear program. TransCanada originally planned to resume operations Oct. 20 on the line that runs from Alberta to the main U.S. oil-storage hub in Cushing, Oklahoma.
“There was a surprising fall on Friday and today’s action could be a reaction to that,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. “There could be some oil bulls taking advantage of the price to extend their positions.”
Crude for November delivery rose as much as 52 cents to $90.57 a barrel in electronic trading on the New York Mercantile Exchange and was at $90.47 at 2:26 p.m. in Singapore. Oil fell 2 percent on Oct. 19 to $90.05, the lowest close since Oct. 8. The contract expires today. The more actively traded December futures were 45 cents higher at $90.89 a barrel.
Brent oil for December settlement gained 45 cents, or 0.4 percent, to $110.59 on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $19.71 to New York-traded West Texas Intermediate grade, up from $19.70 on Oct. 19.
Technical Support
Oil in New York is rising after rebounding from long-term technical support at $89.83 a barrel, data compiled by Bloomberg showed. On the weekly chart, that’s the 50 percent Fibonacci retracement of the decline to $32.40 in December 2008 from an intraday record high of $147.27 in July that year. Buy orders tend to be clustered near chart-support levels.
While the U.S. remains open to negotiations with Iran, there was no deal to meet with officials after the Nov. 6 presidential election, National Security Council spokesman Tommy Vietor said yesterday.
International sanctions against the Persian Gulf nation in response to its nuclear program have removed 1 million barrels a day of oil from the global markets, Maria van der Hoeven, the executive director of the International Energy Agency, said at a conference in Singapore today.
Hedge-fund managers and other large speculators increased their net-long position in crude futures in the week ended Oct. 16, according to Commodity Futures Trading Commission data.
Hedge Funds
Managed money bets that prices will rise, in futures and options combined, outnumbered short positions by 166,278 futures, the Washington-based regulator said in its weekly Commitments of Traders report. Net long positions rose by 5,274 contracts, or 3.3 percent, from a week earlier.
The 590,000 barrel-a-day Keystone pipeline will resume today, James Millar, a TransCanada (TRP) spokesman, said in an e-mail yesterday. The company shut down Keystone on Oct. 17 after routine maintenance testing revealed an “anomaly” on the outside of the line. The Calgary-based company had estimated the pipeline inspections would be complete in three days, and initially planned a resumption of operations on Oct. 20.
The U.S. imported 1.65 million barrels of oil a day into the midcontinent, or PADD 2 region, in the week ended Oct. 12, according to the Energy Department. Most of the crude imported into the Midwest comes from Canada, which is the U.S.’s largest source of foreign oil.
To contact the reporter on this story: Jacob Adelman in Tokyo at jadelman1@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
