Oil rose in New York on speculation that shrinking U.S. stockpiles and increasing gasoline consumption indicate fuel demand is rising in the world’s biggest crude-consuming nation.
Futures advanced as much as 1 percent after the American Petroleum Institute said crude inventories slid the most in six weeks in the seven days ended Jan. 13. Energy Department data today may show supplies climbed for a fourth week, according to a Bloomberg News survey of analysts. U.S. fuel use rose 4.1 percent last week while industrial output gained in December, separate reports showed.
Crude for February delivery gained as much as $1.03 to $101.62 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.16 at 3:58 p.m. Singapore time. The contract, which expires tomorrow, dropped 12 cents to $100.59 yesterday and is up 2.4 percent this year. The more active March contract advanced 57 cents to $101.33 today.
Brent oil for March settlement rose 38 cents, or 0.3 percent, to $111.04 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $9.71, compared with $9.90 yesterday and a record $27.88 on Oct. 14.
Oil Supplies
U.S. crude inventories dropped 4.81 million barrels last week, the most since the week ended Dec. 2, figures from the industry-funded API showed. They are forecast to climb 3 million barrels in the energy department report, according to the median of 12 analyst estimates in the Bloomberg News survey.
Gasoline supplies rose 4.31 million barrels, the API data showed. They are projected to increase 2.35 million barrels in the government report, according to the survey. Distillate inventories, a category that includes diesel and heating oil, fell 900,000 barrels compared with an estimate for a 1.38 million barrel gain.
50-Day Average
U.S. drivers bought 8.37 million barrels a day of gasoline in the week ended Jan. 13, up from 8.044 million a week earlier that was the lowest level in more than seven years, according to MasterCard’s SpendingPulse report yesterday. The company’s data goes back to July 2004.
Oil in New York may rise to an eight-month high above $103.74 a barrel after failing to settle beneath a support level at the 50-day moving average, according to technical analysis by IAF Advisors.
“I think there are signs we are bottoming,” said Phil Flynn, vice president of research at PFGBest in Chicago, in an e-mail. “Gas demand bounced a bit,” he said, citing the Mastercard report. “Still, don’t look for a demand surge. It’s very modest.”
Prices slipped yesterday after President Barack Obama denied a permit for TransCanada Corp.’s Keystone XL pipeline that may have reduced inventories by carrying crude from Alberta’s oil sands to refineries along the U.S. Gulf Coast.
