(For Bloomberg fair value curves, see CFVL <GO>)
May 2 (Bloomberg) -- West Texas Intermediate crude trimmed a second weekly drop as U.S. employers boosted payrolls in April by the most in two years. Brent pared a weekly loss amid tensions between Russia and Ukraine.
Futures rose 0.5 percent in New York, curbing this week’s decline to 0.7 percent. The 288,000 gain in U.S. employment was the biggest since January 2012 and followed a revised 203,000 increase the prior month that was stronger than initially estimated, Labor Department figures showed today in Washington. Ukraine sent armored vehicles and artillery to retake Slovyansk from pro-separatist forces, defying Russian President Vladimir Putin’s demand to pull back troops.
“The U.S. payrolls headlines are optically bullish,” Guy Wolf, global head of market analytics at Marex Spectron Group in London, said by e-mail. “But there are enough negative details for doves to keep policy loose.”
WTI for June delivery advanced as much as 67 cents to $100.09 a barrel in electronic trading on the New York Mercantile Exchange, and traded for $99.93 at 1:36 p.m. London time. The volume of all futures traded was 3 percent above the 100-day average for the time of day.
Brent for June settlement was 84 cents higher at $108.60 a barrel on the London-based ICE Futures Europe exchange. The European benchmark was at a premium of $8.64 to WTI on ICE. The spread widened for a third day yesterday to close at $8.34.
Brent is poised for the first weekly drop in a month as Libya prepared to resume oil exports from its eastern port of Zueitina today. The terminal, which can handle 70,000 barrels a day of crude, is set to start loading a tanker for the first time since the facility was captured by rebels in July, Mohamed Elharari, a spokesman at state-run National Oil Corp, said yesterday.
An agreement on April 6 provided for rebels seeking self- rule in the country’s east to hand over control of Zueitina and Hariga, two of the four ports they seized, in return for an official amnesty.
Libya has become the smallest producer in the 12-member Organization of Petroleum Exporting Countries as unrest disrupted output and shipments. The nation, which holds Africa’s largest crude reserves, pumped 215,000 barrels a day last month, compared with 1.38 million a year earlier, a Bloomberg survey of producers and analysts shows.
The U.S. and European Union have blamed Russia for fomenting unrest in Ukraine’s easternmost, largely Russian- speaking regions. They have threatened to widen sanctions to target Russia’s economy unless Putin helps ease tensions. The Russian president yesterday urged Ukraine to withdraw forces from the east, as the regions of Donetsk and Luhansk slip out of the control of the government in Kiev.
U.S. crude supplies have risen to the highest level since April 1931, monthly government data going back to 1920 show. Reports before 1976 were based on Bureau of Mines figures, according to the Energy Information Administration, the Energy Department’s statistical arm. Alaskan crude in transit was included from 1981. The U.S. is the world’s biggest oil consumer.
“Inventories are clearly starting to have an impact,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney who predicts investors may buy WTI contracts if prices fall to $98.50 a barrel. “It’s the supply side that’s driving oil prices at the moment, rather than demand.”
WTI will probably fall next week amid speculation that inventories will climb further, a Bloomberg News survey shows. Fourteen of 26 analysts and traders, or 54 percent, forecast crude will decline through May 9. Ten respondents estimated a price gain.
Futures have technical support along the lower boundary of an “ichimoku cloud” on a weekly chart, an area where buy orders tend to be clustered, according to data compiled by Bloomberg. This indicator, at about $98.40 a barrel today, is where WTI halted losses in mid-March.
--With assistance from Heesu Lee in Seoul and Ben Sharples in Melbourne.