BLBG:Oil Trades Near Four-Month High Before Federal Reserve Statement
Oil traded near the highest level in four months before a Federal Reserve policy statement that may signal the central bank will keep adding economic stimulus in the U.S., the world’s biggest crude user.
Futures were little changed in New York after climbing 1.2 percent yesterday. The Federal Open Market Committee will renew its commitment to asset purchases during a two-day meeting that began yesterday, according to a Bloomberg News survey of 44 economists. U.S. crude stockpiles increased by 4.2 million barrels last week, data from the American Petroleum Institute showed yesterday. The Department of Energy reports its oil- supply figures today. West Texas Intermediate prices are poised for a third monthly gain, the longest run since April 2011.
“A lot of people are optimistic on the global economic recovery,” said Ken Hasegawa, an energy trading manager at Newedge Group in Tokyo. “Demand is gradually recovering. The DOE data won’t change the general direction of the market.”
WTI for March was at $97.59 a barrel, up 2 cents, in electronic trading on the New York Mercantile Exchange at 3:23 p.m. Singapore time. The volume of all futures traded was 55 percent below the 100-day average. Oil rose to $97.57 yesterday, the highest since Sept. 14, and are up 6.3 percent in January.
Brent for March settlement rose 14 cents to $114.50 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 25 percent below the 100-day average. The European benchmark grade was at a premium of $16.92 to West Texas Intermediate futures, from $16.79 yesterday.
Fed Meeting
The FOMC will renew its policy of purchasing assets after determining that the benefits from the program exceed any risk of inflation or financial instability, according to the survey of economists last week.
U.S. crude stockpiles rose for a fourth week to 368.2 million last week, the highest level in more than a month, the industry-funded API said yesterday. The Energy Department report today may show supplies increased 2.5 million barrels, according to the median estimate of nine analysts surveyed by Bloomberg.
Inventories of gasoline probably advanced by 1 million barrels while distillates, which includes diesel and heating oil, dropped 500,000 barrels, according to the survey.
China, the world’s second-largest oil consumer, will increase its buying of crude from overseas this year by 7.3 percent, the largest gain since 2010, according to the median estimate of five analysts in a survey. Net imports were a record 5.4 million barrels a day in 2012, customs data show. Shipments climbed 6.9 percent last year and 6.3 percent in 2011.
Technical Analysis
The nation, which gets about half its crude from overseas, will boost oil consumption by 4 percent to 9.98 million barrels a day this year, the International Energy Agency forecast in its Monthly Oil Market report on Jan. 18. U.S. demand will be unchanged at 18.7 million barrels a day, the IEA said.
Oil may extend its rally in New York after a “golden cross” formed. The 50-day moving average, at $90.70 a barrel today, climbed above the 100-day mean and pared its discount to the 200-day indicator to 30 cents, the smallest gap since June, according to data compiled by Bloomberg. Investors typically buy when a moving average rises over a longer-term one. Crude’s 14- day relative strength index is higher than 70 for a second day, signaling the advance may stall.
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
