Crude Oil Climbs After U.S. Thanksgiving Retail Sales Surge to a Record

Oil climbed as Thanksgiving retail sales advanced to a record in the U.S., a signal of economic growth in the world’s biggest crude-consuming country.

Futures rose 1.5 percent after U.S. consumers spent $52.4 billion during the holiday weekend, according to the National Retail Federation. Oil and other commodities gained as the Welt am Sonntag newspaper said German Chancellor Angela Merkel and French President Nicolas Sarkozy are planning a stability pact.

“Investors are grasping for anything that signals the direction of the economy, and the retail sales numbers are very positive,” said Chris Barber, a senior analyst at Energy Security Analysis Inc. in Wakefield, Massachusetts. “There also seems to be a little bit more optimism that Europe will find a way out of the debt crisis.”

Crude oil for January delivery increased $1.44 to $98.21 a barrel on the New York Mercantile Exchange, the highest settlement since Nov. 17. Futures touched $100.74 a barrel in intraday trading, the first time since Nov. 18 that they topped $100 a barrel. Prices have risen 7.5 percent this year.

Brent oil for January settlement climbed $2.60, or 2.4 percent, to end the session at $109 a barrel on the London-based ICE Futures Europe exchange. The European contract’s premium to New York crude widened to $10.79 a barrel from $9.63 on Nov. 25. The differential surged to a record high of $27.88 on Oct. 14.

U.S. web sales on Black Friday, Nov. 25, surged 26 percent to $816 million and 18 percent to $479 million on Thanksgiving Day, said ComScore, a Reston, Virginia-based research firm.

“We seem to be up primarily on optimism about Europe,” said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. “We’re also up on the strong retail sales numbers over the weekend and concern about Iran and the surrounding region.”

Merkel Speech

Merkel will deliver a speech on the European debt crisis to the lower house of parliament in Berlin on Dec. 2, previewing a Dec. 8 to Dec. 9 summit of European leaders that is scheduled to discuss proposals for treaty change, Steffen Seibert, Merkel’s chief spokesman, told reporters today. Germany is the biggest economy in the 17-country euro zone, followed by France.

Oil retreated from the day’s high after the International Monetary Fund said today it isn’t discussing a rescue package with Italy after La Stampa newspaper reported it may be preparing a loan. The IMF hasn’t received any request for loans from Italy, Managing Director Christine Lagarde told reporters in Lima, Peru today.

Prices pared gains by more than $2.50 after touching the intraday high.

“The exuberance over the retail numbers is wearing off,” said John Kilduff, a partner at Again Capital, a New York-based hedge fund focusing on energy. “The reality remains that we’re got a very challenging environment both here and in Europe.”

Mideast Supplies

Futures may rise further if Middle East crude supplies are curbed. The U.S., the U.K. and Canada expanded measures aimed at thwarting Iran’s nuclear program last week. Iran is the second- largest oil producer in the Organization of Petroleum Exporting Countries, pumping 3.575 million barrels a day last month, a Bloomberg News survey showed. Saudi Arabia is the top producer.

The Arab League imposed sanctions on Syria yesterday after the country refused to halt a crackdown on protesters. The penalties included a freeze on financial assets in Arab countries and a travel ban on senior officials. Syria pumped an average of 332,000 barrels of oil a day in August, according to the International Energy Agency.

Libyan output now exceeds 750,000 barrels a day, and the country’s second-biggest refinery is operating at full capacity, the state-run National Oil Corp. said on its website yesterday. Output slipped to 45,000 barrels daily from about 1.6 million after the revolt against the former regime of Muammar Qaddafi, based on Bloomberg estimates.

Bullish Bets

Hedge-funds and other money managers cut bullish bets on Brent crude by 5,356 contracts in the week ended Nov. 22, according to data from the ICE exchange. Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 57,523 lots, the London-based exchange said today in its weekly Commitment of Traders report.

Oil volume in electronic trading on the Nymex was 528,914 contracts as of 4:26 p.m. in New York. Volume totaled 316,448 contracts Nov. 25, the lowest level since Dec. 29 and 52 percent below the three-month average. Open interest was 1.29 million contracts.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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