(For Bloomberg fair value curves, see CFVL <GO>)
May 29 (Bloomberg) -- West Texas Intermediate traded near its lowest closing price in a week after the American Petroleum Institute reported that U.S. crude supplies expanded. Brent was steady as Russia called for an end to violence in Ukraine.
Futures were little changed in New York, paring earlier gains of as much as 0.4 percent. U.S. crude inventories rose by 3.49 million barrels last week, the industry group said. Government data today may show a gain of 500,000 barrels, according to a Bloomberg News survey. Russia called for “emergency” measures to halt violence in eastern Ukraine after separatist militias suffered the heaviest casualties of their insurgency.
“The only thing that’s going to drive crude today is inventories,” Michael Hewson, market analyst at CMC Markets Plc, said from London. “You’ve got a pinch point at Cushing, but that doesn’t affect the overall supply for the U.S.”
WTI for July delivery increased 15 cents to $102.87 a barrel in electronic trading on the New York Mercantile Exchange at 1:50 p.m. London time. The contract dropped $1.39 to $102.72 yesterday, the lowest close since May 20 and the biggest decline this month. The volume of all futures traded was about 33 percent below the 100-day average for the time of day. Prices are up 3.2 percent this month.
Brent for July settlement was 56 cents higher at $110.37 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $7.45 to WTI on ICE. The spread closed at $7.09 yesterday, the widest since May 20.
WTI has advanced the past three weeks, the longest rising streak since February, as U.S. crude inventories slid from the highest since at least 1982 when the Energy Information Administration began publishing weekly data. Supplies were at 399.4 million barrels through April 25, according to the EIA.
Stockpiles at Cushing, Oklahoma, the delivery point for WTI, fell by 1.51 million barrels, the API said. Supplies at Cushing have declined in 15 of the past 16 weeks to 23.2 million barrels in the period ended May 16, the lowest level since December 2008, according to the EIA, the Energy Department’s statistical arm. Supplies have decreased since the southern leg of the Keystone XL pipeline began moving crude to Gulf Coast refineries in January.
Gasoline inventories nationwide fell by 1.44 million barrels last week, said the API, which collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The EIA report will probably show they were unchanged at 213.4 million, according to the median estimate of 11 analysts surveyed by Bloomberg.
Brent is poised for a second monthly gain amid separatist violence in Ukraine that erupted after Russia annexed the Black Sea peninsula of Crimea in March. Ukraine is a conduit for Russian oil and natural gas supplies to Europe.
Ukraine stepped up air patrols over Donetsk yesterday as a convoy of pro-Russian rebels moved through the eastern city with an anti-aircraft gun in tow, threatening renewed conflict after dozens of militants were killed in a government operation to retake the area’s biggest airport. President-elect Petro Poroshenko has vowed to wipe out the insurgents and re-establish order after winning office on May 25.
“It’s necessary to take emergency steps to stop the bloodshed and start an inclusive internal Ukrainian dialogue,” Russia’s Foreign Minister Sergei Lavrov told his German counterpart Frank-Walter Steinmeier by phone yesterday, according to the ministry’s website.
--With assistance from Rupert Rowling in London.