Oil traded near a two-day low in New York on speculation fuel demand may falter as Europe struggles with its debt crisis and stockpiles increase in the U.S., the world’s biggest crude consumer.
Futures were little changed after dropping 1 percent yesterday. Greek Prime Minister Lucas Papademos plans to meet the country’s political leaders today to discuss additional measures to secure a second bailout led by the European Union. U.S. crude inventories probably rose to the highest in more than four months and gasoline supplies climbed for a second week, according to a Bloomberg survey before an Energy Department report tomorrow. Prices gained as much as 0.6 percent earlier today after nearing a technical-support level.
“The pattern of increased crude inventories and lower gasoline demand has impacted the outlook in the U.S.,” said Ric Spooner, a chief analyst at CMC Markets in Sydney. “Markets are also watching for a resolution in Europe.”
Oil for March delivery was at $97.12 a barrel in electronic trading on the New York Mercantile Exchange, up 21 cents, at 4:02 p.m. Singapore time. Yesterday, the contract fell 93 cents to $96.91, the lowest settlement since Feb. 2. Prices have declined 1.7 percent this year.
Brent oil for March settlement on the London-based ICE Futures Europe exchange was at $116.12 a barrel, up 19 cents. The European benchmark crude was at a premium of $18.99 to New York-traded West Texas Intermediate, compared with $19.02 yesterday. The spread was a record $27.88 on Oct. 14.
European leaders have increased pressure on Greece to meet the conditions of the 130 billion-euro ($171 billion) rescue, with German Chancellor Angela Merkel saying “time is running out.” While Papademos and the party chiefs already agreed to make further cuts this year, they have yet to close gaps over measures demanded by creditors.
U.S. crude inventories probably rose 2.5 million barrels in the week ended Feb. 3, according to the median estimate of seven analysts surveyed by Bloomberg News before tomorrow’s Energy Department report. Gasoline stockpiles climbed by 500,000 barrels for a second weekly gain and supplies of distillate fuels, including diesel and heating oil, declined 1 million barrels, the survey shows.
Crude stockpiles “are not considered low and we therefore see some downward pressure on WTI,” said Victor Shum, senior principal at Purvin & Gertz Inc., a consultant in Singapore. “That’s why prices are below $100.”
Oil in New York was higher earlier today after settling above technical support along the lower Bollinger Band yesterday, according to data compiled by Bloomberg. This indicator is around $96.28 a barrel today. Buy orders tend to be clustered near chart-support levels.
To contact the reporter on this story: Ben Sharples in Melbourne at firstname.lastname@example.org
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at email@example.com