BLBG: Crude Oil Trades Near Two-Year High on Speculation U.S. Inventories Shrank
Crude traded near a two-year high in New York on speculation stockpiles declined in the U.S., the world’s biggest oil consumer, and as the dollar extended losses.
Oil retraced some of yesterday’s 0.6 percent drop before an Energy Department report forecast to show U.S. inventories shrank for a fourth week, the longest stretch of declines in a year. The dollar fell for a fourth day, bolstering the investment appeal of commodities.
“We are looking ahead to this week’s reports to get a picture of the relative supply and demand factors as they exist here at the end of 2010,” Peter Beutel, president of Cameron Hanover Inc., an energy adviser in New Canaan, Connecticut, said in a note today. “If nothing else, they may tell us more about the economy.”
Crude for February delivery was at $91.15 a barrel, up 15 cents, in electronic trading on the New York Mercantile Exchange at 2 p.m. Singapore time. It rose as much as 34 cents, or 0.4 percent, to $91.34. Yesterday, the contract lost 51 cents after reaching $91.88, the highest since Oct. 7, 2008.
U.S. oil stockpiles probably decreased 3 million barrels from 340.7 million in the week ended Dec. 24, according to the median estimate of nine analysts surveyed by Bloomberg News. Supplies have fallen this month by 19 million barrels, or 5.3 percent, the most since December 2006.
The Energy Department will release its Weekly Petroleum Status Report at 11 a.m. in Washington on Dec. 30, a day later than usual because of Christmas.
The Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, was down for a fourth day, dropping 0.4 percent to 79.90. That’s the longest losing streak in three months.
Japan Factories
Oil, which rallied 78 percent in 2009, has risen 15 percent this year as signs of a global economic recovery bolstered optimism fuel demand will grow.
Japan’s industrial production increased 1 percent in November, the first gain in six months, the Trade Ministry said today. This beat economist estimates, signaling the country’s export-led recovery may regain traction. Japan uses more oil than any country apart from the U.S. and China.
Consumer confidence in the U.S. climbed to a seven-month high in December, a Bloomberg News survey showed before a report today. The Conference Board’s confidence index increased to 56.4 from 54.1 in November, according to the median estimate of 60 economists polled.
Brent crude for February settlement rose as much as 30 cents, or 0.3 percent, to $94.15 a barrel on the London-based ICE Futures Europe exchange.
Gasoline Supplies
U.S. gasoline stockpiles probably increased 1.9 million barrels last week, the Bloomberg News survey showed. Supplies have risen for five weeks to 217.2 million, 5.2 percent above the five-year average, according to the Energy Department.
Gasoline futures fell 0.9 percent yesterday, the most in about two weeks, after snowstorms blanketed cities on the U.S. East Coast, disrupting travel. New York City’s Central Park had 20 inches (51 centimeters) of snow by 8 a.m., the most in December since 1948, the National Weather Service said.
“With so many roads impassable, there was lost transportation consumption that is unlikely to be recovered,” said Beutel at Cameron Hanover.
Gasoline for January delivery in New York dropped as much as 0.3 percent to $2.4144 a gallon.
To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net
To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net.
