Oil Trades Near Highest in Four Months on Colder Weather

Oil traded near the highest level in almost four months in New York before reports that may show the economy recovering in the U.S. and as lower temperatures buoy demand for heating fuels.

West Texas Intermediate was little changed after climbing 0.6 percent yesterday. The U.S. East Coast and Midwest will be 5 degrees Fahrenheit (2.8 Celsius) below normal from Jan. 19 to Jan. 23, according to Commodity Weather Group LLC in Bethesda, Maryland. Retail sales probably rose for a second month in December, a Bloomberg News survey of economists predicted before Commerce Department data today.

“Colder weather is helping the energy complex,” said Andrey Kryuchenkov, an analyst at VTB Capital in London, who predicts WTI may remain capped at about $95.60 a barrel. “The global oil market looks evenly balanced.”

Crude for February delivery was at $93.70 a barrel, down 44 cents, in electronic trading on the New York Mercantile Exchange at 12:55 p.m. London time. The contract increased to $94.14 yesterday, the highest settlement since Sept. 18. Prices dropped 7.1 percent last year.

Brent for February settlement was at $111.58 a barrel, down 30 cents, on the London-based ICE Futures Europe exchange. The more-active March contract slipped 20 cents to $110.75. The front-month European benchmark contract was at a premium of $17.89 to WTI futures. It settled at $17.08 on Jan. 11, the narrowest since Sept. 19.

Retail Sales

U.S. retail sales may have increased as consumers looked beyond the year-end budget battle among lawmakers. The 0.2 percent increase in follow a 0.3 percent gain in November, according to the median forecast of 83 economists surveyed by Bloomberg. Other figures may show New York-area manufacturing stabilized, and wholesale costs were contained.

The nation’s crude stockpiles probably gained by 2.4 million barrels last week, according to a Bloomberg News survey before an Energy Department report tomorrow.

U.S. gasoline supplies rose by 2.6 million barrels in the seven days ended Jan. 11 for an eighth weekly gain, according to the median estimate of eight analysts in the Bloomberg survey before tomorrow’s report. Distillate inventories, a category that includes heating oil and diesel, probably increased by 1.5 million barrels.

Gasoil for February delivery advanced as much as $12, or 1.3 percent, to $966.50 on the ICE exchange. That’s the most since Oct. 30.

U.S. oil output advanced to 7 million barrels a day in the week ended Jan. 4, the most since March 1993, data from the Energy Department show.

The American Petroleum Institute is scheduled to release separate data today. The 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.

The 14-day relative strength index for WTI climbed above 70 yesterday for the second time in three days, according to data compiled by Bloomberg. That level signals a market is overbought and may decline. Today’s reading is 66.8.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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