WTI Rises From One-Week Low Before Stockpile Data; Brent Gains

Mar 26, 2014 8:59 am ET

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March 26 (Bloomberg) -- West Texas Intermediate rose from the lowest close in more than a week ahead of an industry report that may show crude stockpiles climbed in the U.S., the world’s biggest consumer. Brent in London increased amid persisting unrest in Libya.

Futures gained as much as 0.6 percent in New York after dropping yesterday for the first time in three days. Crude inventories rose by 6.28 million barrels last week, the American Petroleum Institute said. An Energy Information Administration report today will probably show supplies expanded by 2.5 million for a 10th weekly gain, according to a Bloomberg News survey. The EIA is the Energy Department’s statistical arm.

“There is a mildly positive bias on the oil price but it depends on U.S. inventories this afternoon,” said Michael Hewson, a London-based market analyst at CMC Markets Plc, which which handles about $100 million a day in U.S. crude contracts. “A big build as consumption starts to drop could well cap the upside.”

WTI for May delivery climbed as much as 57 cents to $99.76 a barrel and was at $99.73 in electronic trading on the New York Mercantile Exchange at 12:30 p.m. London time. The contract fell 0.4 percent yesterday to $99.19, the lowest settlement since March 17. The volume of all futures traded was about 51 percent below the 100-day average for the time of day. Prices are up 1.3 percent this year.

Brent for May settlement gained 25 cents to $107.24 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $7.52 to WTI on ICE.

Libyan Unrest

Rebels seeking self rule in eastern Libya said yesterday that they will only enter talks with the central government to restore the nation’s oil output if Tripoli withdraws a threat to attack oil ports they control. The central government’s parliament approved an extension of Prime Minister Abdullah Theni’s tenure for 15 days, the al-Nayaa television station reported.

Libya’s production is running at 150,000 to 155,000 barrels a day since the Elephant oil field was shut down March 24, Oil Ministry Director of Measurement Ibrahim Al Awami, said by phone from Tripoli today.

In the U.S., crude supplies rose to 375.9 million barrels in the week ended March 14, the highest level since November, according to the EIA. Refinery units are typically shut for maintenance in late winter before restarting in the spring to meet summer demand for gasoline.

Stockpiles

Gasoline supplies shrank by 2.84 million barrels in the week ended March 21, the API said yesterday. They are projected to decline by 1.5 million in the EIA report, according to the median of 11 analysts in the Bloomberg survey.

Distillate inventories, a category that includes heating oil and diesel, increased by 267,000 barrels, said the API. The EIA report may show a 1.38million decline, the survey shows.

“Oil stocks figures coming out of the U.S. will be the most important driver on the macro side,” said Thina Saltvedt, an analyst at Oslo-based Nordea Markets, who sees Brent averaging $106 a barrel in the second quarter.

The industry-funded API in Washington collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA.

The Houston Ship Channel, home to 11 percent of U.S. refining capacity, is open to most voyages, Coast Guard Petty Officer Eric Coleman said yesterday. The waterway was closed on March 22 after a vessel collision led to a 4,000-barrel fuel oil spill.

--With assistance from Winnie Zhu in Singapore and Ben Sharples in Melbourne.