Crude Oil Rises Before Expected U.S. Inventory Decline

Oil climbed, snapping two days of losses in New York on speculation that inventories declined for a third week in the U.S., the world’s biggest crude consumer.

Futures rose as much as 0.6 percent before a government report tomorrow forecast to show U.S. fuel and crude stockpiles fell last week as refiners operated near the highest rates in five years. U.S. retail sales probably expanded last month, the first increase since March, a separate survey showed before a Commerce Department report today.

“U.S. retail sales will be an interesting figure because it’ll provide an insight into whether the improvement that we saw in employment growth is in fact an indication of improving confidence levels,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney.

Oil for September delivery advanced as much as 55 cents to $93.28 a barrel in electronic trading on the New York Mercantile Exchange and traded at $93.19 at 2:53 p.m. in Singapore. It slid 0.2 percent yesterday to $92.73, the lowest close since Aug. 6. Prices are down 5.7 percent since the start of the year.

Brent crude for September settlement, which expires Aug. 16, rose 29 cents to $113.89 a barrel on the London-based ICE Futures Europe exchange. The October contract was up 24 cents at $111.96 a barrel. The European benchmark’s premium to West Texas Intermediate was at $20.71 after closing yesterday at $20.87, the widest since April 4.

U.S. Stockpiles

U.S. crude stockpiles probably fell by 1.75 million barrels last week, according to the median response in a Bloomberg News survey before an Energy Department report tomorrow. The American Petroleum Institute will release separate inventory data today.

U.S. refiners may have operated their plants last week at 92.3 percent of capacity, down 0.3 percentage points, according to the survey. That’s still up from 89.1 percent a year earlier. Processing rates reached 93 percent in the week ending July 20, the highest in about five years.

Gasoline inventories probably slid 2.13 million barrels, or 1 percent, to 203.9 million in the week ended Aug. 10, the survey showed.

Sales at U.S. retailers probably rose 0.3 percent in July after a 0.5 percent drop in June, easing concern that the world’s biggest economy is faltering, according to the median forecast of 65 economists surveyed by Bloomberg News before the government report today.

Fire Extinguished

Royal Dutch Shell Plc (RDSA) extinguished a fire at a unit in the light-oil processing area of its Martinez refinery in northern California, a week after an incident at Chevron Corp. (CVX)’s nearby Richmond refinery that shut the plant’s only crude unit. Spot gasoline prices in San Francisco have risen 27 cents a gallon against futures on the Nymex since then, data compiled by Bloomberg shows.

The Shell incident started at about 2 p.m. local time, Kayla Macke, a Houston-based spokeswoman for the company, said in an e-mailed statement yesterday. Shell evacuated workers from the unit and refinery fire crews put out the blaze, she said.

Gasoline for September delivery gained 0.5 percent to $3.0049 a gallon on the Nymex.

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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