BLBG:Oil Rises After U.S. Fuel Demand Gains, Cushing Stockpiles Drop
Oil rose for the second time in three days after a report showed U.S. fuel demand climbed while crude supplies shrank at Cushing, Oklahoma, the biggest U.S. storage hub and the delivery point for the New York-traded contract.
Futures advanced as much as 0.3 percent after closing little changed yesterday. U.S. refiners supplied 1.2 percent more fuel over the past four weeks than a year earlier, according to the Energy Information Administration report. Cushing stockpiles declined 315,000 barrels last week to 51.4 million, the lowest since the week ended Jan. 4. Brent’s premium to West Texas Intermediate widened to the most in more than a month yesterday.
“We continue to see overall demand-supportive data in Asia and in the U.S.,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney who predicts WTI may climb to $100 a barrel in the next month. “We’re likely to retain that firm tone to trading in oil.”
Crude for March delivery advanced as much as 27 cents to $96.89 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.74 at 1:58 p.m. Singapore time. The volume of all contracts traded was 56 percent below the 100-day average. Prices are up 5.4 percent this year.
Brent for March settlement climbed 15 cents to $116.88 a barrel on the London-based ICE Futures Europe exchange. The number of contracts changing hands was 27 percent higher than the 100-day average. The European benchmark grade was at a premium of $20.14 to WTI. It closed at $20.11 yesterday, the widest since Dec. 24.
Fuel Supplies
Oil may struggle to sustain gains in New York as an indicator of technical momentum continues to decline against the increase in prices so far this week. The moving average convergence-divergence indicator is extending a discount to its signal line after a so-called bearish crossover on Feb. 4, according to data compiled by Bloomberg.
The amount of oil products supplied by U.S. refiners over the past four weeks, a proxy for demand, averaged 18.3 million barrels a day last week, the EIA reported. Gasoline consumption for the same period was 8.4 million barrels a day, 4.7 percent higher than a year ago.
Total U.S. crude stockpiles climbed 2.62 million barrels, the EIA report showed. They were forecast to gain 2.65 million barrels, according to the median estimate of eight analysts in a Bloomberg News survey.
Gasoline supplies rose 1.74 million barrels and distillates slid by 1.04 million, the government report showed. Gasoline inventories were projected to increase 900,000 barrels and distillate supplies, a category that includes diesel and heating oil, were forecast to slip by 625,000, according to the Bloomberg survey.
Keystone Pipeline
Approval for the $5.3 billion portion of the Keystone XL oil pipeline that crosses the U.S.-Canada border is expected “very soon,” Russ Girling, the chief executive officer of TransCanada Corp., said yesterday. The Calgary-based company split the project into two parts after the permit was rejected last year.
The pipeline would deliver 830,000 barrels a day from Canadian oil sands and North Dakota shale fields to U.S. Gulf Coast refineries. Last month, Nebraska’s governor signed off on a revised route through his state. Federal officials are completing a supplemental environmental impact statement, a step toward presidential approval, Girling said.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net; Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
