West Texas Intermediate rose for the third time in four days after data showed the U.S. home-building industry is stabilizing. Brent was little changed near a six-week low.
Prices increased as much as 0.6 percent in New York. Building permits filed for future projects increased last month to the most since October and housing starts in the U.S. were little changed. Crude inventories at Cushing, Oklahoma, fell last week and total U.S. supplies gained for a ninth week, a Bloomberg survey showed before an Energy Information Administration report tomorrow.
“The market is a little optimistic about the U.S. economy and the demand outlook,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “Building permits are increasing and housing starts are not bad. The market is waiting for tomorrow’s inventory report.”
WTI for April delivery gained 24 cents to $98.32 a barrel at 9:32 a.m. on the New York Mercantile Exchange. The volume of all futures traded was near the 100-day average for this time of day.
Brent for May settlement slid 15 cents to $106.09 a barrel on the London-based ICE Futures Europe exchange. Volume was 22 percent below the 100-day average. The European benchmark crude settled at $106.24 a barrel yesterday, the lowest close since Feb. 4. Brent was at a premium of $8.31 to WTI for the same month. The spread closed at $8.62 yesterday.
Building permits increased 7.7 percent to a 1.02 million annual pace in February, reflecting a surge in applications for apartment-building construction, the Commerce Department reported. Housing starts slid 0.2 percent to 907,000 homes at an annualized rate from a revised 909,000 pace in January.
Crude supplies at Cushing, the delivery point for Nymex futures, probably fell 1.4 million barrels last week, according to Tom Finlon, Jupiter, Florida-based director of Energy Analytics Group LLC. Flynn estimated a decrease of 1.5 million. Total crude inventories climbed 2.75 million, according to nine analysts in the Bloomberg survey.
Supplies at Cushing have dropped since TransCanada Corp. (TRP) began operating the southern section of Keystone XL pipeline in January to move oil to the Gulf Coast.
WTI followed losses in Brent yesterday on speculation oil supplies will remain unaffected amid Western sanctions against Russia, the world’s largest crude producer, following Crimea’s vote to secede from Ukraine.
President Vladimir Putin signaled that Russia isn’t about to occupy eastern Ukraine, blaming Western encroachment for forcing him to annex Crimea in a move that’s sparked the worst diplomatic crisis since the Cold War.
“Europe needs the oil and Russia needs the money,” Michael Wittner, the head of oil market research at Societe Generale in New York, said in an e-mailed report today. “So logic and rational reasoning strongly argue that neither the Europeans, backed by the U.S., nor the Russians should use the oil weapon” and stop trade flows, he said.
To contact the reporter on this story: Moming Zhou in New York at email@example.com
To contact the editors responsible for this story: Dan Stets at firstname.lastname@example.org Margot Habiby, Richard Stubbe