WTI Swings on U.S. Jobless Claims as Crude Supplies Seen Falling

Dec 27, 2013 8:19 am ET

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Dec. 27 (Bloomberg) -- West Texas Intermediate swung between gains and losses after fewer Americans than projected filed for unemployment benefits and before data forecast to show crude inventories declined.

Futures were little changed in New York and are poised for a second weekly increase. U.S. jobless claims dropped by 42,000 to 338,000 last week, Labor Department data showed yesterday. Crude stockpiles slid by 2.65 million barrels, a fourth weekly decline, according to a Bloomberg News survey before a report from the Energy Information Administration today.

“The jobless claims data are better than expected and the U.S. is doing fine,” Olivier Jakob, managing director of Petromatrix GmbH in Zug, Switzerland, said today by phone. “The volume is so light that it is difficult to trade.”

WTI for February delivery gained 8 cents to $99.63 a barrel in electronic trading on the New York Mercantile Exchange as of 1:16 p.m. London time. The contract rose 33 cents to $99.55 yesterday, the highest close since Oct. 18. The volume of all futures traded was about 72 percent below the 100-day average. Prices have gained 0.3 percent this week.

Brent for February settlement was down 4 cents at $111.94 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $12.27 to WTI. The spread narrowed for a second day yesterday to close at $12.41.

U.S. Economy

WTI has climbed 8.5 percent in 2013, set for a fourth annual advance in five years, amid signs the U.S. is sustaining its economic recovery. The country is the world’s biggest oil consumer and will account for about 21 percent of global demand this year, according to the International Energy Agency.

The drop in initial jobless applications was more than a median forecast to 345,000 in a Bloomberg survey of 42 economists. The Federal Reserve is trimming its monthly bond purchases because of “cumulative progress and an improved outlook for the job market,” Chairman Ben S. Bernanke said on Dec. 18 in Washington.

Gross domestic product in the third quarter increased at a 4.1 percent annualized rate, up from a previous prediction of 3.6 percent, Commerce Department data showed on Dec. 20.

Oil Supplies

Crude stockpiles decreased to 369.7 million barrels in the week ended Dec. 20, according to the median estimate of 10 analysts surveyed by Bloomberg. Distillate-fuel inventories, including diesel and heating oil, are projected to have slid by 1 million.

Gasoline supplies are forecast to have risen by 1.1 million barrels, the survey shows. Stockpiles climbed to a four-month high of 220.5 million in the prior seven days, said the EIA, the Energy Department’s statistical arm.

WTI may fall next week as gasoline inventories expand amid increased production from refineries, a separate Bloomberg survey shows. Eight of 11 analysts and traders, or 73 percent, forecast futures will decline through Jan. 3.

Futures settled the past four days above its 200-day moving average, according to data compiled by Bloomberg. This indicator is at $98.96 a barrel today. Investors typically buy contracts when prices sustain an advance above technical-resistance levels.

--Editors: Raj Rajendran, James Herron