(For Bloomberg fair value curves, see CFVL <GO>)
Aug. 19 (Bloomberg) -- West Texas Intermediate advanced for the second time in three days before supply data that may signal the strength of fuel demand in the U.S., the world’s biggest oil consumer. Brent traded near the lowest in almost 14 months.
Futures climbed as much as 0.7 percent in New York. Crude stockpiles probably fell by 1.75 million barrels to 365.3 million last week, a Bloomberg News survey showed before an Energy Information Administration report tomorrow. CVR Energy Inc.’s refinery in Coffeyville, Kansas, is restarting operations, Genscape Inc. said yesterday. Brent plunged yesterday as Kurdish and Iraqi forces regained control of Iraq’s largest dam, stalling an advance by Islamic State militants.
“WTI is being supported by the restart of the Coffeyville, Kansas, refinery, and by the expectation of a draw in U.S. crude oil inventories,” Tamas Varga, an analyst at PVM Oil Associates Ltd. in London, said by e-mail.
WTI for September delivery, which expires tomorrow, gained as much as 64 cents to $97.05 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.72 at 1:02 p.m. London time. The more-active October contract was up 25 cents at $94. The volume of all futures traded was about 8.8 percent above the 100-day average for the time of day. Front-month prices declined 1.7 percent this year.
Brent for October settlement rose 6 cents to $101.66 a barrel on the London-based ICE Futures Europe exchange. It slumped 1.9 percent to $101.60 yesterday, the lowest settlement since June 25, 2013. The European benchmark crude traded at a premium of $7.67 to WTI for the same month. The spread closed at $7.85 yesterday.
Activity at some units at CVR’s Coffeyville plant appears to be nearing operational level, Genscape said. WTI declined to a two-week low on July 29 after a fire halted the 115,000 barrel-a-day refinery, prompting speculation that inventory declines at the U.S. oil-storage hub would slow.
U.S. gasoline inventories probably shrank by 1.7 million barrels in the week ended Aug. 15, according to the median estimate in the Bloomberg survey of eight analysts. Distillate stockpiles, including heating oil and diesel, are forecast to have decreased by 300,000 barrels.
Refinery utilization probably slid by 0.45 percentage points to an average 91.15 percent of capacity, the survey shows. That would be the lowest rate since June. The industry- funded American Petroleum Institute in Washington is scheduled to release separate supply data today.
“Given that market consensus is that we’ll see a draw in the data tomorrow, I’m not surprised to see oil bounce back,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney who predicts investors may sell West Texas Intermediate contracts if prices rise to about $98.50 a barrel. “The rolling back of some of the geopolitical concerns is pressuring oil.”
In Iraq, the U.S. will continue “limited” air strikes against Islamic State insurgents, President Barack Obama said yesterday. The U.S. conducted 35 fighter, bomber and drone attacks over the past three days, disrupting their approach on the city of Erbil and allowing Iraqi and Kurdish forces to recapture the Mosul dam.
The conflict in Iraq, the second-biggest producer in the Organization of Petroleum Exporting Countries, has spared the south, home to about three-quarters of its crude production. The nation pumped 3 million barrels a day last month, data compiled by Bloomberg show.
Brent, which fell 1.9 percent yesterday, may extend losses on a bearish technical formation known as a “death cross.” Its 50-day moving average, at about $108.55 a barrel, dropped below the 200-day mean today for the first time since mid-June, according to data compiled by Bloomberg. Futures declined after a similar chart pattern in early March.