Oil Gains for First Time in Three Days as Concern About Debt Crisis Eases
Crude oil rose for the first time in three days as advancing European equity markets eased concern that the region’s debt crisis is damping demand for fuel, while investors bet that some supplies may be at risk.
Futures in New York gained as much as 1.4 percent, halting a slide of more than 4 percent in the previous two trading days, as the Stoxx Europe 600 index advanced 1.6 percent. Opposition fighters in Libya continued to battle loyalists at the town of Bani Walid and the city of Sirte, while anti-government protests in Yemen left 50 people dead this week.
“Given the scale of the price fall, we are seeing some buying interest out there,” said Amrita Sen, a London-based analyst at Barclays Plc. “The fundamentals still look robust with demand, even after slowing down, outpacing supply growth.”
Oil for October delivery on the New York Mercantile Exchange gained as much as $1.21 to $86.91 a barrel and was at $86.75 a barrel at 12:48 p.m. London time. The contract fell 2.6 percent yesterday and will expire today. The more actively traded November future was up $1.02 at $86.83 a barrel.
Brent crude for November settlement was up $1.40 at $110.54 a barrel on the ICE Futures Europe exchange in London. The contract yesterday fell 2.7 percent to $109.14 a barrel. The European benchmark future was at a premium of $23.67 to the November price of West Texas Intermediate, compared with a record settlement of $26.87 on Sept. 6.
OPEC’s ‘Ideal Price’
Futures in New York closed at $85.70 a barrel yesterday, the lowest level in more than three weeks, amid concerns about the European debt crisis and after OPEC’s secretary-general indicated that global consumption of oil is rising less quickly than expected.
Members of the Organization of Petroleum Exporting Countries no longer see $75 a barrel as an ideal price, and the group will discuss altering output levels in December should Libyan production recover, OPEC Secretary-General Abdalla El- Badri told reporters in Dubai today.
Libya production slumped to as little as 45,000 barrels a day last month from 1.6 million barrels at the beginning of the year, according to Bloomberg estimates. Output may rise to 1 million barrels a day in six months, el-Badri said yesterday.
Supply disruption in North Africa, Nigeria, Angola and Azerbaijan reduced global supply of light, sweet crude by 1.4 million barrels a day in the first eight months of the year, according to Bank of America Corp.
“The physical Brent market remains tight as a drum,” Francisco Blanch, New York-based commodity strategist at the bank, wrote in a report dated yesterday. Brent will average $102 a barrel in the fourth quarter, according to its estimates.
Saudi Inventories
Saudi Arabia, the world’s largest oil exporter, cut exports and increased inventories in July, a sign that demand worldwide may be slowing. The kingdom pumped 9.6 million barrels a day, down 2 percent from June, the Joint Organization Data Initiative reported Sept. 18. The output was lower than earlier estimates by the Organization of Petroleum Exporting Countries and the International Energy Agency.
Greece will talk today with its main creditors after a “productive” round of discussions in a teleconference with International Monetary Fund and European Union officials yesterday aimed at staving off default, the Athens-based finance ministry said in an e-mailed statement.
U.S. crude oil supplies probably declined to an eight-month low last week as refineries cut deliveries with the start of a maintenance cycle, a Bloomberg News survey showed. Stockpiles fell 1.5 million barrels, or 0.4 percent, to 344.9 million in the seven days ended Sept. 16, according to the median of nine analyst estimates before a weekly Energy Department report tomorrow. The industry-finance American Petroleum Institute publishes its inventory figures today.
To contact the reporter on this story: Rachel Graham in Belfast at rgraham13@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
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