Brent Above $100 to 5-Day High as European Stocks Rise

Brent crude futures rose to a one- week high above $100 a barrel on speculation last week’s drop was excessive.

Brent advanced as much as 1.2 percent after the contract’s 14-day relative strength index slipped to 31 on April 19, signaling prices had declined too rapidly. The Stoxx Europe 600 Index increased as much as 0.9 percent. Money managers reduced net-long positions, or wagers that West Texas Intermediate will rise, by 6.8 percent in the week ended April 16, according to the U.S. Commodity Futures Trading Commission. They trimmed holdings on Brent for the second week to the lowest since Dec. 18, data from ICE Futures Europe exchange show.

“There’s a recovery from the sell-off last week and crude is growing in tandem with equities,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said by phone today. “Some buy orders may have been triggered by Brent breaching $100, so computers are driving the market to a degree.”

Brent for June settlement rose as much as $1.15 to $100.80 a barrel and was at $100.78 as of 1:24 p.m. London time. The contract fell 3.4 percent last week. The front-month European benchmark grade was at a premium of $11.60 to June WTI compared with $11.38 on April 19.

WTI for May delivery, which expires today, was at $88.85 a barrel, up 84 cents, in electronic trading on the New York Mercantile Exchange, after dropping 3.6 percent last week. The more-active June future was up 92 cents at $89.19. The volume of all Brent contracts traded was 11 percent below the 100-day average while WTI was 14 percent above.

Qatar, Vitol

Crude will trade at $100 in the third quarter after a second quarter correction driven by oversupply and a fall in stock markets, the chief executive officer of Qatar International Petroleum Marketing Co., or Tasweeq, Saad Al- Kuwari said today at the Middle East Petroleum and Gas Conference in Abu Dhabi.

Brent last closed above $100 on April 15 and has now fallen for three weeks in a row, the longest run since November.

“I don’t see any great movement in the days to come,” Vitol Group CEO Ian Taylor said at the same conference. “There’s nothing special about $100. It can go a bit higher or a bit lower.”

Global oil demand will grow by 1 million barrels a day in 2013 and the Organization of Petroleum Exporting Countries needs to maintain supplies at current levels to avoid a surplus this year, Pierre Barbe, the head of trading and shipping at Total SA, said in a speech today at the Abu Dhabi conference.

Hedge Funds

Net-long positions in WTI held by money managers, including hedge funds, commodity pools and commodity-trading advisers, declined by 13,298 futures and options combined to 183,032, the least since the week ended March 19, the CFTC report showed. It was the biggest drop since the period ended Feb. 26.

Hedge funds and other money managers cut bullish bets on Brent crude by 8,780 contracts in the week ended April 16, the ICE Futures Europe exchange said today in its weekly Commitment of Traders report.

“It’s too early to see a return of the longs, as I think we need to see Brent above $100 to spark fund buying again,” Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London, said by e-mail today before the ICE data was published.

The average price for regular gasoline at U.S. pumps fell 11.04 cents a gallon in the past two weeks to $3.5363, according to Lundberg Survey Inc. The survey covers the period ended April 19 and is based on information obtained at about 2,500 filling stations by the Camarillo, California-based company. The average price has dropped 25.87 cents from the peak on Feb. 22, and 37.64 cents from the price on April 20, 2012, Lundberg said.

To contact the reporter on this story: Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net

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

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