WTI Fluctuates as U.S. Crude, Fuel Stockpiles Seen Lower

West Texas Intermediate snapped a two-day drop amid better-than-forecast economic data in Europe and estimates that U.S. crude inventories probably dropped to the lowest since January.

Futures reversed losses of as much as 0.6 percent after reports showed German factory orders increased the most in eight months and Italy’s recession eased in the second quarter. U.S. crude stockpiles fell by 1.1 million barrels to 363.5 million last week, according to a Bloomberg News survey of analysts before tomorrow’s Energy Department report. Libya’s largest oil-export terminal remained shut amid protests, with output at some fields at less than a 10th of previous rates.

“Crude rebounded just around the time of the Italian GDP figures,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark. “The overall euro zone outlook appears to improve, though with big regional variance.”

WTI for September delivery advanced as much as 71 cents to $107.27 a barrel in electronic trading on the New York Mercantile Exchange and was at $106.89 as of 1:31 p.m. London time. It had dropped as much as 59 cents to $105.97. The volume of all futures traded was 16 percent below the 100-day average.

Brent for September settlement rose 31 cents to $109.01 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $2.14 to WTI.

Industrial Output

German orders, adjusted for seasonal swings and inflation, increased 3.8 percent from a month earlier, driven by contracts for bulk items, the Economy Ministry in Berlin said today. Economists forecast a gain of 1 percent in June, according to the median of 42 estimates in a Bloomberg News survey. Italian gross domestic product contracted 0.2 percent in the first quarter, beating forecast of 0.4 percent, national statistics institute Istat said in a preliminary report in Rome today.

The Energy Department will release its report at 10:30 a.m. Washington time tomorrow.

U.S. gasoline stockpiles fell by 500,000 barrels in the week ended Aug. 2, according to the median estimate of nine analysts surveyed by Bloomberg. Distillate inventories, a category that includes heating oil and diesel, are forecast to have decreased by 400,000 barrels.

The industry-funded American Petroleum Institute will release separate supply data today.

Es Sider

Libya’s biggest export terminal, Es Sider, can store crude for 20 more days before filling up, Ibrahim Al Awami, the director of the inspection and measurement department of the oil ministry, said yesterday. The port closed on July 28 amid protests by staff and armed guards.

Interruptions at ports and other installations across Libya reduced the country’s oil production to 800,000 barrels a day last month, the least since December 2011, a Bloomberg survey of output from the Organization of Petroleum Exporting Countries shows. That’s half the post-revolution peak of 1.6 million barrels a day reached a year earlier, the data show.

WTI has technical support along the bottom of an upward-sloping trend channel going back around six weeks on the daily chart, according to data compiled by Bloomberg. This line is at about $104.50 a barrel today. Buy orders tend to be clustered close to chart-support levels.

-- Editors: Raj Rajendran, Matthew Brown

To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.