Crude Oil Rises for an Eighth Day in London on Euro Optimism, Cold Snap

Oil rose for a third day in New York after Greek politicians were said to have reached a deal on austerity measures and a U.S. report showed initial jobless claims unexpectedly declined last week.

Crude advanced as much as 1.2 percent. The leaders of Greece’s main political parties reached an agreement on austerity measures needed to secure a second international rescue program, European Central Bank President Mario Draghi said. U.S. applications for jobless benefits fell by 15,000 to 358,000, Labor Department figures showed today. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg News survey.

“The risk of falling down to deep recession is starting to decrease,” said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. “The news about Greece together with more positive signs on the U.S. economy has boosted the outlook for oil demand.”

Oil for March delivery on the New York Mercantile Exchange rose as much as $1.19 to $99.90 a barrel and was at $99.64 at 2:04 p.m. London time. Brent oil for March settlement rose for an eighth day on the ICE Futures Europe exchange in London, gaining $1.01 to $118.21. The European benchmark’s premium to the New York-traded West Texas Intermediate grade widened to $18.57 from $18.48 yesterday. The spread reached a record $27.88 on Oct. 14.

OPEC Report

The Organization of Petroleum Exporting Countries cut its forecast for global oil demand in 2012 as the economic recovery struggles to gain momentum.

The group’s Vienna-based secretariat reduced its estimate of consumption for this year by 120,000 barrels a day, to 88.76 million a day, in its monthly market report today. OPEC’s output rose to the highest in more than three years in January as Libya, Kuwait and Iraq boosted production, and is exceeding demand by almost 5 percent, data from the report show.

Oil may extend its rally in New York as futures approach a “golden cross” formation on the daily technical chart, according to data compiled by Bloomberg. The 100-day moving average, at $94.43 a barrel today, has pared a discount to the 200-day mean to 24 cents, the smallest since mid-September. Investors tend to buy contracts when a shorter-term moving average rises above a longer-term one.

Stockpile Report

U.S. refineries operated at 83 percent of capacity, up 1 percentage point from the previous week, according to an Energy Department report yesterday.

Crude inventories rose by 304,000 barrels to 339.2 million in the week ended Feb. 3, according to the report. A median gain of 2.5 million barrel was forecast by analysts in a Bloomberg News survey. Imports fell 5.3 percent.

Gasoline surged to the highest price in more than five months on speculation refinery shutdowns in Europe and the U.S. will trigger a supply crunch. Gasoline for March delivery in New York climbed 0.4 percent to $2.9870 a gallon today. It rose 4.77 cents to $2.9752 a gallon yesterday, the highest settlement since Aug. 31.

Imports of the motor fuel dropped 32 percent last week, the Energy Department said. Stockpiles rose 1.6 million barrels, more than a projected 875,000 barrel gain. Distillate-fuel inventories, including heating oil and diesel, increased 1.2 million barrels, compared with a forecast for supplies to decline 875,000 barrels.

To contact the reporters on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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