SD: Oil Climbs From Three-Month Low as U.S. Refineries Run at Record
(Bloomberg) -- Oil advanced from a three-month low as stockpiles in the U.S. fell more than forecast amid record-high refinery runs.
Futures climbed as much as 1.4 percent in New York. U.S. inventories declined as refiners used the most crude in weekly data since 1989. The full impact of higher Iranian exports won’t be felt until 2016 as the nuclear deal is implemented, banks including Goldman Sachs Group Inc. predict.
Oil’s rebound from a six-year low has faltered amid speculation a global glut will persist as U.S. drillers return rigs to fields and Iran seeks to regain market share. While total U.S. crude inventories declined last week, supplies remain almost 100 million barrels above the five-year average for this time of the year, according to the EIA.
“Refining activity in the U.S. is at its peak, but demand will inevitably slow down as the summer season ends,” Giovanni Staunovo, an analyst at UBS Group AG, said Thursday by phone from Zurich. “There are signs of increasing investment activity among producers, which could weigh on oil prices.”
West Texas Intermediate for August delivery gained as much as 76 cents to $52.17 a barrel in electronic trading on the New York Mercantile Exchange and was at $51.96 at 10:55 a.m. London time. The contract slid $1.63 to $51.41 on Wednesday, the lowest close since April 9. The volume of all futures traded was about 5 percent above the 100-day average. Prices are 2.5 percent lower this year.
U.S. Supplies
Brent for August settlement, which expires Thursday, was 93 cents higher at $57.98 a barrel on the London-based ICE Futures Europe exchange. It fell $1.46 to $57.05 on Wednesday. The European benchmark crude was at a premium of $5.85 to WTI. The more-active September contract rose 60 cents to $57.72.
U.S. refineries used 16.8 million barrels a day last week, up 229,000 barrels from the previous period and the most since 1989, the EIA reported Wednesday.
Inventories at Cushing, Oklahoma, the delivery point for U.S. benchmark oil, rose by 438,000 barrels to 57.1 million for a third weekly gain, according to the EIA. Total inventories declined by 4.3 million to 461.4 million, the first drop in three weeks. Supplies were projected to shrink by 1.9 million barrels, according to a Bloomberg survey.
Iran, the fourth-biggest member of the Organization of Petroleum Exporting Countries, won’t achieve a crude-export boost of more than 500,000 barrels a day, or about 50 percent, until next year as the Islamic Republic’s compliance with curbs on its nuclear program is verified, according to banks including Goldman, Citigroup Inc. and Commerzbank AG.
“The oil price may have bottomed out for now,” Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt, said by phone. “The Iranian agreement still has many hurdles to overcome, and even then it will take time before the crude hits the market.”
