Oil Near One-Week Low in New York; Set for Weekly Decline
Oil rebounded from the lowest close in seven days in New York, paring a weekly decline, on speculation a strengthening U.S. economy will increase demand for crude.
Futures advanced as much as 0.8 percent after falling 1.8 percent yesterday. The number of Americans saying the U.S. economy is improving climbed to the highest level since 2004, a survey showed yesterday. The International Energy Agency said it isn’t planning a release of emergency oil stockpiles. Prices fell this week after reports showed bigger-than-predicted manufacturing contractions in Europe and China.
“The economic situation is coming more into focus,” said Gerrit Zambo, a trader at Bayerische Landesbank in Munich. “The Chinese numbers put a lot of pressure on the markets this week, while better-than-expected U.S. jobless figures kept oil supported.”
Oil for May delivery rose as much as 82 cents to $106.17 a barrel on the New York Mercantile Exchange and was at $105.59 at 12:14 p.m. London time. It slid $1.92 yesterday to $105.35, the lowest close since March 15, and is down 1.4 percent this week.
Brent oil for May settlement gained 67 cents to $123.81 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded West Texas Intermediate was at $18.22 after reaching an almost five- month high of $19.54 on March 14.
No Release Planned
A release of strategic reserves isn’t warranted at the moment, said Maria van der Hoeven, executive director of the IEA. “Stock releases are about disruption of supplies and there is no disruption of supplies,” she said in New Delhi.
French Industry Minister Eric Besson said March 21 that releasing some strategic oil stockpiles was “one option” being considered to counter rising crude prices.
Oil has risen 6.8 percent in New York this year as Iran threatened to shut the Strait of Hormuz, a transit route for a fifth of the world’s oil, in response to Western sanctions on its petroleum exports aimed at halting its nuclear program.
Thirty-four percent of respondents to Bloomberg’s monthly consumer expectations survey said the U.S. economy was improving, the largest share since January 2004. Applications for unemployment benefits dropped last week to the lowest level in four years, the Labor Department said yesterday.
An index of Chinese manufacturing in March from HSBC Holdings Plc and Markit Economic yesterday fell to 48.1 from 49.6 in February. A reading below 50 indicates contraction. A euro-area measure of services and manufacturing industries dropped to 48.7 for March from 49.3. Economists predicted an increase to 49.6.
Gasoline demand in the U.S. slid for the third week in four in the seven days ended March 16, an Energy Department report showed this week.
Oil may drop next week due to the dip in U.S. fuel consumption and Saudi Arabian Oil Minister Ali al-Naimi’s remarks this week that the kingdom can increase output immediately, a Bloomberg News survey showed. Seventeen of 30 analysts, or 57 percent, said oil will fall through March 30.
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