Oil Trades Near Four-Week High on U.S., Asian

Oil traded near the highest level in almost four weeks, heading for a monthly gain, as signs of economic revival in the U.S. and Asia bolstered the outlook for global crude demand.

Futures were little changed after gaining 1.8 percent last week. Consumer spending probably rose in March as incomes grew in the U.S., the world’s biggest oil user, economists said before Commerce Department data today. Factory owners in South Korea are the most upbeat in nine months and business confidence is at an eight-month high in New Zealand, reports showed.

“We are still getting areas of demand and the market will be optimistic toward that and really try and focus in on that,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity-markets newsletter in Sydney. “We’re looking for it to move back though to $105 to $106 a barrel.”

Crude for June delivery was at $104.92 a barrel, down 1 cent, on the New York Mercantile Exchange at 3:16 p.m. Singapore time. The contract advanced 0.4 percent to $104.93 on April 27, the highest close since April 2. Prices are 1.8 percent higher this month and up 6.2 percent this year.

Brent oil for June settlement was at $119.50 a barrel, down 33 cents, on the London-based ICE Futures Europe exchange. Prices are down 2.8 percent this month, heading for the first monthly decline since December. The European benchmark contract’s front month premium to West Texas Intermediate was at $14.58, from $14.90 on April 27.

Technical Resistance

Oil’s advance in New York may stall near its 50-day moving average, which is at $105.17 a barrel today. The price marks a technical resistance level at which some traders sell.

Crude’s trading range in April has been the tightest for any month in 17 years as concern eases that supplies will be disrupted and reports show slower U.S. economic growth. This month it has swung from $100.68 to $105.49 a barrel, a difference of 4.8 percent. That’s the smallest since February 1995, when it traded from $18.13 to $18.98.

New York futures rose to $110.55 a barrel on March 1 as Western nations prepared sanctions against Iran, then slipped as tension eased. U.S. gross domestic product growth slowed to a 2.2 percent rate in the first quarter, according to the Commerce Department.

Economic Outlook

Household purchases, which account for about 70 percent of the U.S. economy, rose 0.4 percent last month after a 0.8 percent gain in February that was the most in seven months, according to the median estimate of 62 economists surveyed by Bloomberg News. The data may also show incomes grew 0.3 percent, following a 0.2 percent gain.

An index measuring South Korean manufacturers’ expectations for May was at 90, the strongest since August 2011, the Bank of Korea said in a statement in Seoul today. A net 35.8 percent of New Zealand companies expect the economy will improve over the next 12 months, up from 33.8 percent in March and the highest since July, according to an ANZ National Bank Ltd. survey released in Wellington today.

Gasoline for May delivery was little changed at $3.206 a gallon on the New York Mercantile Exchange. Prices are heading for a 5.4 percent decline for the month, the first since November. The more actively traded June contract fell 0.2 percent to $3.1393 a gallon.

Gasoline Prices

Hedge funds cut bullish bets on gasoline by the most in four months, data from the Commodity Futures Trading Commission’s Commitments of Traders report on April 27 showed. Money managers reduced net-long positions by 6,383 futures and options combined, or 7.3 percent, to 80,839 in the seven days ended April 24. It was the biggest weekly drop since Dec. 20 and the lowest level since the week ended Jan. 24.

Funds cut bullish crude-oil wagers by 2,878, or 1.4 percent, to 196,426 futures and options combined in the period.

Regular gasoline at the pump fell for 11 consecutive days to a nationwide average of $3.826 a gallon on April 26, according to Heathrow, Florida-based AAA, the largest U.S. motoring club. Speculators have cut bullish bets by 16 percent after reaching a record in the week ended March 6 on the lowest demand for this time of year since 2003.

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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