BLBG: Oil Trades Near $80 Before Report Forecast to Show Supply Gain
By Grant Smith
March 3 (Bloomberg) -- Crude oil traded little changed near $80 a barrel in New York before a report forecast to show that crude inventories expanded for a fifth week in the U.S., the world’s largest energy consumer.
The U.S. Energy Department may say later today that crude supplies rose by 1.28 million barrels last week, according to a Bloomberg survey. Oil futures gained 1.3 percent yesterday after the industry-funded American Petroleum Institute said stockpiles of distillate fuel dropped by 4.07 million barrels. In Nigeria, militants attacked a Royal Dutch Shell Plc flow station.
“Eighty to $81 is the big hurdle to overtake,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Today’s data will likely be a reminder that there’s no shortage of oil in the market, and no reason to push oil prices higher.”
Crude oil for April delivery traded at $79.81 a barrel, up 13 cents, in electronic trading on the New York Mercantile Exchange as of 11:11 a.m. London time. Brent crude for April delivery was at $78.24 a barrel, up 6 cents on the London-based ICE Futures Europe exchange.
The Energy Department’s report is scheduled for release at 10:30 a.m. in Washington. The data may show that stockpiles of distillate fuels such as heating oil and diesel declined 1.05 million barrels in the week ended Feb. 26, and that gasoline supplies increased 300,000 barrels, according to the median of responses in Bloomberg’s survey.
Crude Supplies Climb
Crude oil inventories jumped by 2.67 million barrels last week, while gasoline stockpiles increased by 909,000 barrels, the API said late yesterday.
“U.S. inventories are still high, but not as high as they were in the first half of 2009,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “Markets are becoming a little more optimistic about the international economic outlook.”
A Saudi Arabian-flagged product tanker was captured by pirates in the Gulf of Aden on March 1, the European Union Naval Force said. The tanker, with a crew of 14, was heading for the Red Sea port of Jeddah, according to Commander John Harbour, a spokesman for EU Navfor in Northwood, England.
Shell’s Kokori oil flow station in Nigeria was attacked yesterday as militants renewed operations against the energy industry in the southern Delta region.
Nigeria Attack
The People’s Patriotic Revolutionary Force claimed responsibility for the assault in a statement, saying it had begun “fresh and final hostilities in the Niger Delta and beyond.” The group called on international oil companies to leave the region immediately.
Implied demand for oil in China, the world’s second-largest energy consumer, may rise 5 percent this year to 427 million metric tons, after imports reached a record last year, according to a newsletter published by the official Xinhua News agency.
An increase in apparent consumption will deepen China’s dependence on foreign crude oil, boosting net imports to more than 210 million tons this year, according to the China Oil, Gas & Petrochemicals monthly newsletter. Apparent demand is defined as net imports plus refining output, excluding inventories.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
