BLBG:Oil Trades Near One-Week Low on Forecast of U.S. Supply
Oil traded near its lowest closing level in a week in New York, after sliding the most in two months yesterday, before a report that may show rising stockpiles in the U.S., the world’s biggest crude consumer.
West Texas Intermediate was little changed after losing 1.6 percent yesterday. Inventories probably increased for a third week, according to a Bloomberg News survey before Energy Information Administration data tomorrow. Crude may extend losses after dropping out of an upward-sloping trend channel, a technical indicator for rising prices, data compiled by Bloomberg show. Futures fell yesterday on the prospect of renewed talks over Iran’s nuclear program.
“Oil fundamentals point to a significant retracement after the market overreacted to the upside,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London, who predicts the European benchmark, Brent, may decline to $110 a barrel this month. “One other important point is the progress or otherwise of nuclear talks with Iran. Progress on that front could spark a sell-off.”
Crude for March delivery gained as much as 37 cents to $96.54 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.47 at 10:21 a.m. London time. The volume of all futures traded was 7.4 percent above the 100-day average. The contract slid $1.60 yesterday to $96.17, the lowest close since Jan. 25 and the biggest decrease since Dec. 6.
Brent for March settlement advanced 40 cents to $116 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 37 percent above the 100-day average. The European benchmark grade was at a premium of $19.55 to WTI futures, down from $19.43 yesterday.
Fuel Stockpiles
U.S. crude stockpiles probably rose 2.5 million barrels last week, according to the median estimate of seven analysts in the Bloomberg survey. Gasoline supplies increased 1.8 million barrels and distillate inventories, a category that includes heating oil and diesel, declined by 500,000, the survey shows.
The industry-funded American Petroleum Institute is scheduled to release separate inventory data today. 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 EIA, an Energy Department agency, for its weekly survey.
Oil slid yesterday amid signs of easing tension in the Middle East. Iran considers an offer to negotiate directly with the U.S. over its nuclear program a “step forward,” Ali Akbar Salehi, the Persian Gulf oil producer’s foreign minister, said Feb. 3. Talks to defuse tension over Iran’s nuclear work will be held in Kazakhstan Feb. 25, he said at the Munich Security Conference.
Pump Prices
The U.S. will offer bilateral negotiations if the Islamic Republic’s Supreme Leader Ayatollah Ali Khamenei is prepared for “serious” discussions, U.S. Vice President Joe Biden said the day before at the same event.
Regular gasoline in the U.S. jumped 18 cents, or 5.4 percent, from a week earlier to $3.538 a gallon yesterday, the biggest gain since Feb. 28, 2011, according to data compiled by the EIA. Crude futures have risen more than $10 a barrel since mid-December and have gained eight weeks in a row, matching a streak that ended in August 2004.
BP Plc (BP/), which reported a slide in fourth-quarter profit today as oil and gas production slipped, said refining margins improved in the final three months of last year. BP’s benchmark refining margin, a global indicator of profitability, was $13.17 a barrel, up from $9.08 in the year-earlier quarter, according to the company.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
