BLBG:Oil Heads for Ninth Gain in 10 Weeks as Open Interest at Record
West Texas Intermediate oil headed for its ninth weekly gain in 10 weeks after a report signaled OPEC will cut crude shipments this month. Open interest for the U.S. benchmark grade rose to a record.
WTI was little changed in New York and up 1.7 percent this week. Prices climbed 0.3 percent yesterday as the number of contracts outstanding rose to the highest level since the futures began trading on the New York Mercantile Exchange in March 1983. OPEC will cut crude shipments by 0.9 percent this month, according to Oil Movements, a tanker tracker. U.S. claims for jobless benefits were less than forecast last week, government data showed.
“It is clear a better global growth scenario is emerging and being priced into markets generally and oil in particular,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. “We had further evidence with the improvement in jobless claims in the U.S. It just adds to that broader, better demand scenario.”
Crude for March delivery was at $97.34 a barrel, up 3 cents, in electronic trading in New York at 12:51 p.m. Singapore time. The volume of all futures traded was 12 percent below the 100-day average. Prices are 6 percent higher this year.
Brent for April settlement lost 7 cents to $117.93 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 $19.99 to WTI futures for the same month. The difference was $20.10 yesterday, the narrowest since Feb. 5.
OPEC Cuts
The number of WTI contracts outstanding on Feb. 13 climbed to 1,665,014, Chris Grams, a Chicago-based spokesman for Nymex- owner CME Group Inc. said in a phone interview yesterday. That surpassed the previous high of 1,664,400 on May 12, 2011, when prices dropped on the death of Osama Bin Laden.
Open interest for Brent oil set a record of 1,547,943 contracts on Feb. 8. The “path of least resistance” for Brent is higher, Michael Wittner, the head of oil-market research at Societe Generale SA in New York, said in a report e-mailed today.
The Organization of Petroleum Exporting Countries will ship 23.51 million barrels a day of crude in the four weeks to March 2, down 220,000 from 23.73 million in the previous period, Oil Movements said in an e-mailed report. The decline shows “restraint on the supply side” rather than solely a seasonal drop in demand, Roy Mason, the company’s founder, said by phone from Halifax, England. It’s too early for refineries to be curbing purchases ahead of seasonal maintenance, he said.
Saudi Output
Saudi Arabia, OPEC’s biggest oil producer and exporter, kept its output near a 20-month low of about 9 million barrels a day for a second month in January, a Persian Gulf official with knowledge of the country’s oil policy said Feb. 7, declining to be identified because the information is confidential. OPEC members supply about 40 percent of the world’s oil.
Applications for unemployment insurance payments in the U.S., the world’s biggest crude consumer, decreased to 341,000 in the week ended Feb. 9, according to Labor Department data yesterday in Washington. That’s fewer than projected by any of the 49 economists surveyed by Bloomberg.
Oil in New York may decline in coming days as futures approach a “double-top” formation on the daily technical chart, according to data compiled by Bloomberg. Crude halted advances near $98 a barrel on Jan. 31 and Feb. 13, creating two peaks separated by a trough around $95. The lower price signals an area where buy orders may be clustered, and losses tend to accelerate with a breach of the double-top’s support level.
Oil Forecasts
Prices may decline next week on an increase in U.S. crude supplies as refineries cut operating rates to perform maintenance, according to a Bloomberg survey of 40 analysts and traders. Nineteen respondents, or 48 percent, forecast crude will decline through Feb. 22. Thirteen, or 33 percent, predicted an increase and eight forecast little change.
Crude stockpiles increased 560,000 barrels to 372.2 million last week, according to an Energy Information Administration report Feb. 13. Refineries operated at 83.8 percent of capacity, down 0.4 percentage point from the prior week, the EIA said.
Oil prices may struggle to advance further as the balance of supply and demand doesn’t merit further gains, Credit Suisse Group AG said in an e-mailed report yesterday. Saudi Arabia is “happy” with Brent at $110 a barrel, Natixis SA said in a separate note.
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
