Crude Extends Gain After Report Shows Surprise Drop in Distillate Supplies
Aug. 25 (Bloomberg) -- Loretta Cross, managing partner for corporate advisory and restructuring services at Grant Thornton LLP, discusses the potential impact of the BP Plc Gulf of Mexico oil spill on mergers and acquisitions in the energy industry. Cross talks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)
Crude oil futures extended gains after a U.S. government report showed an unexpected decline in supplies of distillate fuels.
Distillate supplies, which include heating oil and diesel, fell 739,000 barrels to 175.2 million, the Energy Department said today in a weekly report. Stockpiles were forecast to increase by 1.15 million barrels, according to the median of 16 analyst estimates in a Bloomberg News survey.
Inventories of crude oil rose 3.42 million barrels to 361.7 million, the department said. Supplies were forecast to climb by 1.2 million barrels.
Crude for October delivery advanced $1.86, or 2.6 percent, to $73.78 a barrel at 10:35 a.m. on the New York Mercantile Exchange. It traded at $73.63 a barrel before the release of the report at 10:30 a.m. in Washington.
Futures also gained after the Institute for Supply Management’s gauge of manufacturing unexpectedly rose. The Tempe, Arizona-based group reported an increase to 56.3 in August from 55.5 a month earlier. Readings greater than 50 signal growth.
Economists forecast the ISM factory index would decline to 52.8, according to the median of 78 projections in a Bloomberg News survey. Estimates ranged from 49.9 to 56.
Manufacturing in China grew at a faster pace in August after the weakest performance since early 2009 in July, signaling that the economy’s slowdown is stabilizing.
Index Rises
The purchasing managers’ index rose to 51.7 from 51.2, exceeding forecasts, a government-backed report showed. Seasonal factors might have had an effect because the index typically gains as factories restart following July maintenance, Mizuho Securities Asia Ltd. said. A separate PMI released by HSBC Holdings Plc and Markit Economics gained to 51.9 from 49.4.
The August reading for the government index was more than the median 51.5 forecast in the Bloomberg survey of 17 economists. Fifty is the dividing line between expansion and contraction.
Australia’s economy grew at the fastest pace in three years last quarter, stoked by China’s demand for iron ore. Gross domestic product advanced 1.2 percent from the first quarter, when it rose a revised 0.7 percent, the Bureau of Statistics said in Sydney today.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
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