Oil Trades Near a Two-Day Low on Rising U.S. Crude Stockpiles, Europe Debt
Oil traded near a two-day low as signs of rising U.S. crude supplies and concern Europe’s credit crisis will spread after a stalemate over Greek debt relief stoked speculation demand will weaken.
Futures were little changed in New York after dropping 0.6 percent yesterday. U.S. stockpiles increased 7.33 million barrels last week, the biggest gain in four weeks, figures from the industry-funded American Petroleum Institute showed. An Energy Department report today may show they climbed 1.45 million barrels. European finance ministers pushed bondholders to provide greater debt relief for Greece.
Crude for March delivery was at $99.19 a barrel, up 24 cents, in electronic trading on the New York Mercantile Exchange at 11:12 a.m. Sydney time. The contract yesterday fell 63 cents to $98.95, the lowest since Jan. 20. Front-month prices are 15 percent higher the past year.
Brent oil for March settlement dropped 55 cents, or 0.5 percent, to $110.03 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to West Texas Intermediate futures closed at $11.08, compared with a record $27.88 on Oct. 14.
The European Union’s ban on Iranian oil imports starting July 1 is already priced into crude, leading to a muted market reaction, according to Ole Hansen, a training advisory manager at Saxo Bank A/S. The “unlikely” closing of the Strait of Hormuz by Iran could cause a price spike of $20 to $40 a barrel, he said yesterday.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
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