WTI Crude Gains a Third Day; OPEC Set to Maintain Output Limit

West Texas Intermediate rose for a third day amid forecasts U.S. crude stockpiles dropped last week for the first time since September. OPEC is poised to keep its production target unchanged at a meeting tomorrow.

Futures climbed as much as 0.5 percent after data yesterday showed U.S. manufacturing accelerated more than estimated. Crude inventories shrank by 700,000 barrels, the first decline in 11 weeks, according to a Bloomberg News survey before a government report tomorrow. Ministers from the Organization of Petroleum Exporting Countries meeting in Vienna will probably stick with a 30 million barrel-a-day ceiling, said three delegates who spoke on of anonymity because discussions are private.

“We’ve had some fairly oil-friendly news,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, who expects WTI to remain in the $93 to $95 a barrel range. “Brent remains supported with OPEC supply probably unchanged, continued disruptions in Libya and good demand for North Sea crude out of Korea, but I doubt we’ll break any higher than $112.”

WTI for January delivery gained as much as 43 cents to $94.25 a barrel in electronic trading on the New York Mercantile Exchange, and was at $93.93 as of 9:42 a.m. London time. The contract increased $1.10 to $93.82 yesterday, the highest close since Nov. 25. The volume of all futures traded was about 46 percent below the 100-day average.

Brent for January settlement was down 9 cents at $111.36 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $17.40 to WTI futures, compared with $17.63 yesterday.

“In Equilibrium”

The global oil market is “in equilibrium,” Saudi Arabian Oil Minister Ali al-Naimi said in Vienna yesterday. The kingdom pumps almost a third of the oil from OPEC’s 12 members.

“The market is in the best condition it can be,” al-Naimi said upon arrival at his hotel. “Demand is great, economic growth is improving. We are at the right price right now. Everybody is going to supply what they can to satisfy demand.”

Rising output from outside OPEC will trim the amount of crude required from members next year to 29.6 million barrels a day from 29.9 million in 2013, according to a Nov. 12 forecast from the group’s secretariat. OPEC pumped 30.007 million barrels a day in November, based on Bloomberg estimates, exceeding the official target even as output in member states such as Iraq, Libya and Iran were disrupted. The group supplies about 40 percent of the world’s oil.

Forties Crude

South Korea bought six million barrels of North Sea Forties crude in November, the largest monthly shipment in 1 1/12 years, according to shiptracking data compiled by Bloomberg. Refiners in the Asian nation benefit from a free-trade agreement with the European Union, which exempts them from a 3 percent import tax. Forties is one of four grades used to calculate benchmark Dated Brent. The other blends are Ekofisk, Brent and Oseberg.

WTI fell 2.2 percent last week, the seventh loss in eight weeks, as U.S. crude stockpiles expanded amid a surge in production. Output rose to 8.02 million in the seven days ended Nov. 22, the fastest rate in almost 25 years, according to the Energy Information Administration, the Energy Department’s statistical arm.

Gasoline supplies probably climbed by 1.25 million barrels in the week through Nov. 29, according to the median estimate of eight analysts surveyed by Bloomberg before the EIA report. Distillate inventories, including heating oil and diesel, are projected to have decreased by 1.15 million.

Refinery Runs

Refinery utilization advanced by 0.7 percentage points to an average 90.1 percent of capacity, the highest since September, the survey shows. The American Petroleum Institute is scheduled to release separate supply data today. The industry group in Washington collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA.

Manufacturing in the U.S. expanded in November at the fastest pace in more than two years, the Institute for Supply Management’s index showed yesterday. The reading of 57.3, which topped a median economist forecast for 55.1, follows gains in China and Europe.

To contact the reporter on this story: Laura Hurst in London at lhurst3@bloomberg.net

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

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