Oil Trades Near One-Week High on U.S. Fuel-Inventory Drop

Oil rose for a second day in New York after fuel stockpiles declined more than expected in the U.S., the world’s biggest gasoline consumer.

Futures climbed as much as 0.4 percent after closing yesterday at the highest price in almost a week. U.S. gasoline inventories fell 4.3 million barrels, the Department of Energy said. Supplies were projected to drop 1.38 million barrels, according to a Bloomberg News survey. The decrease countered figures that showed imports and demand for the motor fuel fell. Gasoline prices at the pump have slid five straight days, the longest streak since December.

“This report was mostly bullish, due to products,” Michael Wittner, the head of oil market research at Societe Generale SA in New York, said in a report. “The most consistent driver for the product draws was lower supply rather than healthy demand.”

Crude for May delivery rose as much as 44 cents to $103.14 a barrel in electronic trading on the New York Mercantile Exchange and was at $103.06 at 2:23 p.m. Singapore time. The contract yesterday climbed $1.68, or 1.7 percent, to $102.70, the highest close since April 5. Prices are up 4.3 percent this year.

Brent oil for May settlement rose 26 cents, or 0.2 percent, to $120.44 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 $17.41, from $17.48 yesterday.

Gasoline Demand

Refinery utilization fell 1.9 percentage points to 83.8 percent of capacity last week, according to the Energy Department. That’s the biggest drop since the period ended Feb. 24. Motor-gasoline products supplied, a proxy for demand, shrank 102,000 barrels a day and imports slid 180,000 barrels a day.

Prices at the pump may have peaked for the year. Regular gasoline, averaged nationwide, declined for a fifth day to $3.915 a gallon on April 10 after surging 20 percent and reaching $3.936 on April 4, according to data from AAA, the biggest U.S. motoring club. Americans have purchased 5.3 percent less gasoline so far this year than in 2011, data from credit- card receipts analyzed by MasterCard Inc. (MA)’s SpendingPulse showed on April 10.

U.S. distillate inventories, a category that includes diesel and heating oil, declined 4 million barrels, the Energy Department report showed. They were forecast to slip 250,000 barrels, according to the median estimate of 10 analysts in the Bloomberg survey. Crude stockpiles rose 2.8 million barrels compared with a projected increase of 2 million.

Europe, Iran

Oil prices have gained this year on concern that tension with Iran will disrupt global supplies. France remains “open” to the possibility of a release of crude stockpiles by International Energy Agency member countries to keep prices in check, Industry Minister Eric Besson said yesterday.

Crude’s advance in New York created a so-called bullish engulfing pattern on the candlestick chart, signaling increased buying, according to data compiled by Bloomberg. Futures also settled above the 100-day moving average, which represents technical support today at $101.63 a barrel.

Natural gas futures in New York closed below $2 per million British thermal units yesterday for the first time in a decade on a growing supply glut caused by mild weather and record production. Prices for May delivery slid 2.3 percent to $1.984 per million British thermal units on the Nymex yesterday, the lowest settlement price since Jan. 28, 2002. They were unchanged today.

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 at akwiatkowsk2@bloomberg.net

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