(For Bloomberg fair value curves, see CFVL <GO>.)
Dec. 26 (Bloomberg) -- West Texas Intermediate crude rose to a two-month high on a report showing that fewer Americans than projected filed applications for unemployment benefits.
Futures climbed 0.3 percent. U.S. jobless claims fell by 42,000 to 338,000 last week, Labor Department data show. The median forecast of 42 economists surveyed by Bloomberg called for a drop to 345,000. A government report tomorrow will probably show U.S. crude supplies slipped 2.65 million barrels last week, according to a Bloomberg survey. Markets in London and New York were closed yesterday for Christmas.
“The focus of the market has been economic strength,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “We’ve been seeing strong fuel demand and can expect it to increase further.”
WTI for February delivery rose 33 cents to $99.55 a barrel on the New York Mercantile Exchange. It was the highest settlement since Oct. 18. The volume of all futures traded was 77 percent below the 100-day average at 3:48 p.m. Prices have advanced 8.4 percent in 2013, set for the fourth annual gain in five years.
Brent for February settlement increased 8 cents to end the session at $111.98 a barrel on the London-based ICE Futures Europe exchange. It was the highest close since Dec. 3. The volume of all futures traded was 80 percent lower than the 100- day average.
The European benchmark grade traded at a $12.48 premium to WTI, down from $12.83 on Dec. 24. The spread widened to $19.38 during trading on Nov. 27, the most since March.
U.S. equities also increased, extending records for benchmark indexes, after the release of the employment data. The Standard & Poor’s 500 Index climbed 0.5 percent and the Dow Jones Industrial Average 0.8 percent.
U.S. crude stockpiles fell to 369.7 million barrels in the seven days ended Dec. 20, according to the median estimate of 10 analysts surveyed by Bloomberg this week. Supplies increased by 716,000 barrels to 368.5 million, the industry-funded American Petroleum Institute said on Dec. 24.
“If there’s a supply drop in tomorrow’s report it could send the market flying to $100,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York.
Inventories of gasoline probably rose by 1.1 million barrels last week, according to the survey. Supplies of distillate fuel, a category that includes diesel and heating oil, are projected to have decreased by 1 million.
Gasoline for January delivery climbed 0.58 cent to close at $2.82 a gallon on the Nymex. It was the highest settlement since Sept. 6.
Ultra low sulfur diesel futures for January delivery increased 1.65 cents, or 0.5 percent, to end the session at $3.0948 a gallon in New York. It was the highest settlement since Sept. 13.
The Energy Information Administration is scheduled to release its stockpile report at 11 a.m. tomorrow in Washington. The government requires that data be filed with the Energy Department’s statistical arm, while the API collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines.
WTI has settled above its 200-day moving average, which stands at $98.92 a barrel today, for four days, data compiled by Bloomberg show. Investors typically buy contracts when prices sustain an advance above chart-resistance levels.
“We’re getting technical support,” Yawger said. The close above the 200-day average “could set us up to move higher tomorrow even if the report shows a build.”
Fighting in South Sudan, which exports about 220,000 barrels a day of crude, has killed at least 500 people and forced the government to evacuate some oil workers. Rebel forces loyal to former Vice President Riek Machar said they captured the oil-producing state of Unity on Dec. 21. The country has sub-Saharan Africa’s largest reserves after Nigeria and Angola, according to data from BP Plc.
Implied volatility for at-the-money WTI options expiring in February was 12.7 percent, down from 13.2 on Dec. 24, data compiled by Bloomberg showed.
Electronic trading volume on the Nymex was 115,677 contracts at 3:49 p.m. It totaled 138,784 contracts Dec. 24, the lowest level since Dec. 24, 2012. Open interest was 1.6 million contracts.
--With assistance from Jake Rudnitsky in Moscow. Editors: Margot Habiby, Bill Banker