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Crude Oil Rises a Second Day on Lower U.S. Crude Supplies, Dollar's Drop
Oil advanced for a second day after an industry report showed U.S. crude inventories declined and the dollar weakened against the euro, boosting the appeal of commodities as an alternative investment.
Futures also rose as stocks climbed after improved demand for bonds from Portugal to Poland eased concern that Europe’s sovereign-debt crisis will derail the global economic recovery. U.S. crude stockpiles fell 7.31 million barrels last week, the American Petroleum Institute said. An Energy Department report today may show supplies increased.
“There continues to be this continued sense of relief that the economy doesn’t appear to be heading back into recession,” David Taylor, a market analyst at CMC Markets Ltd. in Sydney, said in an e-mailed note.
The October contract gained as much as 60 cents, or 0.8 percent, to $75.27 in electronic trading on the New York Mercantile Exchange, and was at $75.17 at 11:12 a.m. Sydney time. Yesterday, it added 58 cents to $74.67. Prices have dropped 5.2 percent this year.
U.S. stocks followed European equities higher after Portugal’s sale of bonds due in 2021 attracted bids for 2.6 times the amount offered, compared with a bid-to-cover ratio of 1.6 in the earlier March sale. The Standard & Poor’s 500 Index climbed 0.6 percent in New York, and the Dow Jones Industrial Average advanced 0.5 percent.
Price Forecast
The U.S. Energy Department cut its crude-oil price forecast for 2010 to $77.37 a barrel from $79.13 in August, according to its monthly Short-Term Energy Outlook released yesterday. Prices have averaged $77.86 a barrel this year.
An Energy Department report today will probably show crude inventories climbed 1 million barrels last week, according to the median of 15 responses in a Bloomberg News survey.
Gasoline supplies rose 654,000 barrels last week, the American Petroleum Institute said. An Energy Department report will probably show stockpiles declined 1 million barrels, the Bloomberg News survey shows.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
The dollar traded at $1.2739 per euro from $1.2720 in New York yesterday.
Gasoline Demand
Demand for gasoline in the U.S. slid to the lowest level in six months last week, according to MasterCard Inc.’s SpendingPulse report yesterday. Motorists bought an average 9.13 million barrels a day in the week ended Sept. 3, down 0.5 percent from the prior week. It was the lowest level since Feb. 12 and the third straight drop.
Brent crude oil for October settlement climbed as much as 39 cents, or 0.5 percent, to $78.56 a barrel on the London-based ICE Futures Europe exchange. It gained 43 cents, or 0.6 percent, to $78.17 yesterday, the highest price since Aug. 10.
Brent cost $3.50 a barrel more than Nymex futures yesterday. The spread was at $3.65 on Sept. 7, the widest between the most- active contracts on the New York and London exchanges since May 20.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
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