Oil rebounded from a 10-month low in New York on signs of shrinking U.S. crude inventories and after the Federal Reserve said it may to use a range of methods to bolster the economy.
Futures gained for the first time in three days after the Fed said yesterday it will keep interest rates near zero until mid-2013 and use other tools “as appropriate.” Crude supplies fell the most since June, according to the industry-funded American Petroleum Institute. The International Energy Agency said it may need to cut next year’s estimate for oil demand.
“Brent and WTI have made strong gains this morning on the back of brighter sentiment on markets after the Federal Reserve’s decision not to raise the federal funds rate until mid-2013,” said Carsten Fritsch, an analyst in Frankfurt at Commerzbank AG, the third most-accurate forecaster of oil prices in the second quarter.
Crude for September delivery advanced as much as $3.60, or 4.54 percent, to $82.90 a barrel in electronic trading on the New York Mercantile Exchange, and was at $82.12 at 1:17 p.m. London time. The contract yesterday fell $2.01, or 2.5 percent, to $79.30, the lowest settlement since Sept. 29. Prices are down 10 percent this year.
Brent oil for September settlement gained $3.66, or 3.6 percent, to $106.23 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $24.11 to U.S. futures, having reached a record of $24.23 earlier.
IEA Projections
Brent crude oil may fall to $80 a barrel in a “mild” recession, a price that would prompt the Organization of Petroleum Exporting Countries to reduce supply, Bank of America Merrill Lynch said in a report dated yesterday.
The IEA said threats to global economic recovery may cut oil demand growth next year by more than 60 percent, while keeping underlying forecasts for 2011 and 2012 little changed.
The Paris-based agency, which advises 28 industrialized nations on energy policy, trimmed demand forecasts for 2011 by 60,000 barrels a day as fuel costs weigh on consumers, and raised projections for next year by 70,000 a day to 91.1 million on growth in Japan. The IEA expects global oil consumption will increase 1.6 million barrels a day, or 1.8 percent, in 2012. It may expand by less than half that amount if worldwide growth misses expectations, it said.
“It looks like markets want to turn back up,” Peter Beutel, president of Cameron Hanover Inc., an energy adviser in New Canaan, Connecticut, said in an e-mailed note. Traders bought oil after the settlement and “prices were back in positive numbers after the API report, which showed inventory drawdowns across the board,” he said.
U.S. Supplies
U.S. crude-oil supplies declined 5.21 million barrels to 348.6 million last week, the American Petroleum Institute said. An Energy Department report today may show stockpiles increased 1.35 million barrels in the seven days ended Aug. 5, according to the median estimate of 12 analysts and traders in a Bloomberg News survey.
Gasoline inventories decreased 1.01 million barrels to 211.2 million barrels, the API data show. The Energy Department report will probably show they rose 900,000 barrels, according to the Bloomberg News survey.
The API collects stockpile data on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed for its weekly survey. Oil-supply totals from the API and the department have moved in the same direction 71 percent of the time in the past year and 75 percent in the past four years.
No comments:
Post a Comment