(For Bloomberg fair value curves, see CFVL <GO>)
May 7 (Bloomberg) -- West Texas Intermediate advanced for a second day after an industry report showed crude stockpiles declined in the U.S., the world’s biggest oil consumer. Brent gained in London.
Futures rose as much as 0.5 percent in New York. Crude inventories shrank by 1.82 million barrels last week as supplies slid at Cushing, Oklahoma, the American Petroleum Institute reported. Stockpiles probably expanded further from a record high, a Bloomberg News survey shows before separate data from the Energy Information Administration today. The U.S. is negotiating with the European Union on additional sanctions on Russia, two White House officials told Congress yesterday.
“Cushing inventories are probably getting toward a base level now,” said Ric Spooner, a chief strategist at CMC Markets in Sydney who predicts investors may sell West Texas if futures climb to $100.50 a barrel. “Prices might otherwise be weaker if it were not for Ukraine.”
WTI for June delivery increased as much as 46 cents to $99.96 a barrel in electronic trading on the New York Mercantile Exchange and was at $99.86 at 10:52 a.m. Sydney time. The contract gained 2 cents to $99.50 yesterday. The volume of all futures traded was about 37 percent below the 100-day average. Futures have advanced 1.5 percent this year.
Brent for June settlement rose as much as 27 cents, or 0.3 percent, to $107.33 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $7.31 to WTI. The spread narrowed for a second day yesterday to close at $7.56.
Stockpiles at Cushing, the delivery point for New York- traded futures, fell by 1.46 million barrels in the week ended May 2, the industry-funded API reported yesterday. Supplies at the largest U.S. oil-storage hub may drop to about 20 million in two to three weeks, Adam Longson, a Morgan Stanley analyst in New York, forecast on May 5. Inventories have decreased by 39 percent since January to 25.4 million, said the EIA, the Energy Department’s statistical arm.
Crude stockpiles nationwide expanded by 1.25 million barrels last week to about 400.6 million, according to the median estimate of 10 analysts surveyed by Bloomberg before the EIA report today. That would be the highest level since the U.S. began reporting weekly data in 1982.
“Near-term gains in oil will likely be held back by high inventory levels in the U.S. and an already heavily long investment fund community,” Mark Pervan, the head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in an e-mailed note today.