BLBG:Oil Slips From One-Week High; U.S. Crude Supplies Rising
West Texas Intermediate slipped from the highest level in more than a week after the biggest gain since January. U.S. crude stockpiles probably increased last week, a Bloomberg News survey showed.
Futures declined as much as 0.4 percent, after climbing 1.4 percent yesterday for the first advance in four days. Crude inventories probably rose 2.35 million barrels, according to the survey before an Energy Information Administration report tomorrow. Retail gasoline in the U.S. rose to a record for this time of year, EIA data showed. London-traded Brent’s premium to WTI was steady after shrinking for the first time in eight days.
“The market is well supplied,” said Gerrit Zambo, an oil trader at Bayerische Landesbank in Munich, who predicts Brent will trade from $115 to $120 a barrel this month. “Prices would need much more momentum from the economic growth side to go higher.”
Crude for March delivery dropped as much as 35 cents to $96.68 a barrel and was at $96.70 a barrel in electronic trading on the New York Mercantile Exchange as of 8:56 a.m. London time. The volume of all futures traded was in line with the 100-day average. The contract increased $1.31 to $97.03 yesterday, the most since Jan. 2 and the highest closing price since Feb. 1.
Brent for March settlement, which expires tomorrow, fell 30 cents to $117.83 a barrel on the London-based ICE Futures Europe exchange. The more-active April contract slid 30 cents to $116.91 a barrel. The volume of all futures traded was 7 percent below the 100-day average. The European benchmark grade for March was at a premium of $21.11 to WTI futures. The gap narrowed $2.08 to $21.10 yesterday. That was the biggest one-day contraction since Dec. 17.
U.S. gasoline
Regular gasoline at the pump in the U.S. climbed 7.3 cents, or 2.1 percent, from a week earlier to $3.611 a gallon yesterday, the highest since Oct. 22 and a record for this time of year, according to data compiled by the EIA. Prices have risen for eight consecutive weeks. WTI posted a run of eight weekly gains through Feb. 1 that was the longest in more than eight years.
U.S. crude inventories probably increased for a fourth week to 374 million barrels in the seven days ended Feb. 8, according to the median estimate of eight analysts in the Bloomberg survey. That would be the longest run of gains since May. All the respondents forecast a rise.
Gasoline stockpiles were probably unchanged and distillate fuels slid 1.5 million barrels, the survey shows.
Cushing Stockpiles
The EIA, the Energy Department’s statistical arm, is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington. The industry-funded American Petroleum Institute will release separate supply 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 Energy Department for its weekly survey.
A drop in supplies at Cushing, Oklahoma, the delivery point for WTI, should cause the Brent-WTI spread to shrink to $7.50 a barrel in the second quarter, Goldman Sachs said in a Feb. 10 report. Stockpiles at the storage hub climbed to a record 51.9 million barrels in the week ended Jan. 11, data from the EIA show. They were at 51.4 million in the seven days ended Feb. 1.
The Seaway pipeline will help shift surplus crude from Cushing to the U.S. Gulf Coast even after Enterprise Product Partners LP said Jan. 31 that capacity will be limited until late 2013, according to Goldman. New pipe capacity from the Permian Basin to the Gulf Coast this quarter will also reduce the glut, it said. The bank has predicted since April that the differential would narrow to $5 within three months and reiterated that forecast on Aug. 16.
To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
