Oil Trades Near One-Week High as U.S. Manufacturing Expands

Oil traded near the highest close in a week after a measure of U.S. manufacturing beat economists’ forecasts and before a report forecast to show shrinking fuel supplies in the world’s biggest consumer of crude.

Futures were little changed in New York after advancing for a third day yesterday. The Institute for Supply Management’s U.S. factory index increased to 51.5 in September, exceeding the median forecast of 49.7 in a Bloomberg News survey. Crude supplies in the U.S. probably gained last week, while gasoline and diesel inventories shrank, according to a separate survey.

“We’ve seen a bounce off recent lows, and I think the primary motivator was the ISM figure,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “It points to the fact that we’re seeing what looks like an improvement in the rate of growth in the U.S. economy.”

Crude for November delivery was at $92.33 a barrel, down 15 cents, in electronic trading on the New York Mercantile Exchange at 2:15 p.m. Singapore time. The contract climbed 0.3 percent to $92.48 yesterday, the highest close since Sept. 21. Prices are down 6.6 percent this year.

Brent oil for November settlement was at $112.12 a barrel, down 7 cents, on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate was $19.76 a barrel, up from $19.71 yesterday.

Fuel Supplies

Oil in New York has technical resistance along its 50-day moving average, at $93.64 a barrel today, according to data compiled by Bloomberg. Futures halted yesterday’s advance near this indicator. Sell orders tend to be clustered near chart- resistance levels.

U.S. crude stockpiles probably gained 1.5 million barrels last week, according to a Bloomberg survey before an Energy Department report tomorrow. The American Petroleum Institute will release separate inventory data today.

Gasoline supplies may have dropped by 375,000 barrels last week, according to the median estimate of six analysts in the survey. Distillate stockpiles, a category that includes heating oil and diesel, probably fell 450,000 barrels.

The industry-funded API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.

U.S. Gasoline

Gasoline at U.S. pumps dropped for the second week, tracking a more than $4-a-barrel slide in oil prices last month and after refiners on the U.S. Gulf Coast restored output following Hurricane Isaac.

The national average for regular gasoline fell 2.2 cents to $3.804 a gallon from a week ago, the U.S. Energy Information Administration said in a survey posted on its website yesterday. Prices were up 11 percent from $3.433 a year earlier.

Retail gasoline began dropping Sept. 24 after 11 weeks of consecutive gains that boosted prices to a record high for the season. Oil in New York slid $4.28 a barrel last month and settled below $90 on Sept. 26 for the first time in eight weeks. Crude accounts for about 66 percent of the costs of the motor fuel, the Energy Department said.

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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