Futures climbed 13 cents after data bolstered confidence for growth in the world’s largest crude-consuming country. U.S. oil supplies increased 1.13 million barrels to 377.5 million last week, the highest level since July, an Energy Information Administration report showed. A 2.5 million-barrel gain was projected in a Bloomberg survey of 10 analysts.
“Much of the economic data is looking pretty good, which is supporting the markets,” said Chip Hodge, who oversees a $9 billion natural-resource bond portfolio as senior managing director at Manulife Asset Management in Boston. “Inventories are sound. There’s no reason to be concerned about them now.”
Crude oil for April delivery settled at $92.76 a barrel on the New York Mercantile Exchange. The volume of all futures traded was 18 percent below the 100-day average at 3:47 p.m. Prices have gained 1 percent this year and have declined 4.9 percent this month.
Brent for April settlement fell 84 cents, or 0.7 percent, to end the session at $111.87 a barrel on the London-based ICE Futures Europe exchange. Prices have dropped 3.2 percent so far this month. The volume of all futures traded was 3.3 percent higher than the 100-day average for this time.
The European benchmark crude was at a $19.11 premium to WTI futures, the least since Feb. 1.
Orders for U.S. durable goods excluding transportation equipment, which is often volatile, climbed 1.9 percent in January, exceeding the median forecast of economists surveyed by Bloomberg, Commerce Department data showed. An index of pending home resales rose 4.5 percent to 105.9, the most since April 2010, the National Association of Realtors said.
The Standard & Poor’s 500 Index gained 1.5 percent, and the Dow Jones Industrial Average advanced 1.4 percent. The euro strengthened as much as 0.6 percent to $1.3141.
“The fundamentals of the economy are supporting oil, even though the market itself is well supplied,” said David McAlvany, chief executive officer of McAlvany Financial Group in Durango, Colorado, which manages $520 million. “The market has been well supplied for a while and is now a little more so.”
Italian political leaders sparred over forming a government after inconclusive elections last weekend. U.S. President Barack Obama summoned congressional leaders to a meeting at the White House March 1, the day $85 billion in spending cuts begin, as both parties say a deal to avert them probably won’t come before the deadline.
“The headwinds are political,” Hodge said. “The economic indicators are decent but concerns about Italy and the budget issues here are raising concerns about the future.”
Crude stockpiles at Cushing, Oklahoma, the delivery point for New York futures, decreased 75,000 barrels to 50.6 million barrels last week, according to the EIA, the Energy Department’s statistical arm. Cushing supplies rose to a record 51.9 million last month.
U.S. production of crude slipped 22,000 barrels a day to 7.1 million last week. Output climbed to 7.12 million barrels a day the prior week, the most since August 1992, as the combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies trapped in shale formations in states including North Dakota, Texas and Oklahoma.
Refineries operated at 85.1 percent of capacity in the seven days ended Feb. 22, up 2.2 percentage points from the prior week. Units are often idled for maintenance in February as attention shifts away from heating oil and before gasoline consumption rises.
Gasoline production gained 3.1 percent to 9.21 million barrels a day last week, the most this year, the report showed. Inventories of the fuel decreased 1.86 million barrels to 228.5 million last week.
“The low rate of refinery activity and what that would mean for gasoline supplies was a major concern ahead of the report,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “The rebound in refinery runs argues against any worries there. Gasoline production was up more than 360,000 barrels from a year earlier.”
Gasoline for March delivery fell 12.51 cents, or 4.2 percent, to $2.8565 a gallon on Nymex, the lowest settle since Jan. 23. The futures have tumbled 7.2 percent so far this week.
Consumption of gasoline rose 1.9 percent to 8.6 million barrels a day last week, the EIA report showed. Total fuel demand climbed 1.5 percent to 18.7 million barrels a day.
World powers and Iran ended two days of talks without agreement on the country’s nuclear program. Iranian nuclear negotiator Saeed Jalili said negotiations with the U.S. and its partners will resume next month in Istanbul after discussions in Almaty, Kazakhstan, concluded.
“The result of the discussions is yet another example in a series of postponements,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. “Geopolitical tensions with Iran can easily flare up and boost the risk premium embedded in the oil price.”
Electronic trading volume on the Nymex was 395,454 contracts as of 3:47 p.m. It totaled 408,997 contracts yesterday, 25 percent below the three-month average. Open interest was 1.65 million.
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