West Texas Intermediate oil rose for a fourth day as the dollar weakened against the euro. A report today may show U.S. crude stockpiles climbed to an eight- month high. Chinese refining fell to the lowest in four months.
Futures gained 0.9 percent in New York. U.S. crude inventories probably increased an eighth week in the seven days through March 8, the longest run of gains since May, a Bloomberg News survey showed before Energy Department data tomorrow. China cut oil-processing by 2 percent last month, government data showed today. South Korean officials said refineries importing North Sea crude will receive smaller rebates for exports of products.
“The euro has strengthened, and that often accounts for higher prices,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London, who predicts that Brent, the European oil benchmark, may advance to $112 a barrel this month.
WTI for April delivery rose as much as 78 cents to $92.84 a barrel in electronic trading on the New York Mercantile Exchange and was at $92.75 at 12:46 p.m. London time. The volume of all futures traded was 13 percent above the 100-day average. The contract rose 11 cents yesterday to $92.06, the highest close since Feb. 27. Prices are up 1 percent this year.
Brent for April settlement was up 33 cents, or 0.3 percent, at $110.54 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 44 percent above the 100-day average. The European benchmark grade’s premium to WTI futures was at $17.78, having settled at $18.16 yesterday, the narrowest closing spread since Jan. 31.
WTI reversed a loss of as much as 46 cents as the dollar weakened versus the euro, making commodities priced in the U.S. currency more attractive as a hedge against inflation. The euro was at $1.3046 as of 12:39 p.m. London time.
U.S. crude supplies probably increased by 2.25 million barrels to 383.6 million, the highest level since June, according to the median estimate of eight analysts in the Bloomberg survey. Gasoline inventories dropped 1.25 million barrels, the survey shows. Distillate stockpiles, a category that includes heating oil and diesel, probably slid by 1.65 million barrels. The Energy Department is scheduled to release the weekly report at 10:30 a.m. in Washington tomorrow.
“The market is very amply supplied as we approach the low season for refining, and that’s going to be reflected in growing global inventories,” said Andy Sommer, a senior oil analyst at Axpo Trading AG in Dietikon, Switzerland. “There’s probably another $4 to $5 of downside left for the oil price.”
The average retail gasoline price in the U.S. fell 1.3 percent to $3.71 a gallon last week, according to the Energy Information Administration Gasoline and Diesel update. It declined from $3.759 a gallon the previous week.
Daily oil-refining volumes in the China, the world’s second-largest crude consumer, dropped to 9.9 million barrels a day last month, according to the China Federation of Logistics and Purchasing. That’s the lowest level since October. January processing was at about 10.1 million, combined data for the first two months of the year show. The nation’s crude output increased 0.8 percent to 16 million tons in February.
South Korean refiners that import North Sea crude have been asked to submit their views on proposed tax revisions by March 18, according to officials at the Korea Customs Service, SK Innovation Co. (096770), the country’s biggest refiner, and the Korea Petroleum Association, which represents its four oil-processing companies. They asked not to be identified, citing department and company policies.
Oil in New York has technical support along its 100-day moving average, around $90.83 a barrel today, according to data compiled by Bloomberg. Futures halted intraday declines along this indicator for the past two days, signaling buy orders may be clustered close to it.
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