Oil rose for a fourth day in New York as fighting in Libya heightened concerns about Middle East exports, while expectations of an international bailout for Portugal bolstered confidence in the economic outlook.
Crude gained as much as 0.9 percent as the U.K. launched further attacks by submarine against Libyan air-defense systems. Libyan government troops increased military action, killing 16 people yesterday in the towns of Misrata and Zentan, an opposition spokesman said. European Union leaders meet in Brussels today to sign off on measures aimed to resolve the region’s sovereign debt crisis.
“The growing consensus that Portugal will be bailed out is driving prices this morning, though at the same time the focus is still in the Middle East-North Africa region,” said Thorbjoern Bak Jensen, an analyst at Global Risk Management in Middelfart, Denmark.
Crude for May delivery rose as much as 94 cents to $106.69 a barrel in electronic trading on the New York Mercantile Exchange, and was at $106.45 at 11:35 a.m. London time. Yesterday, the contract climbed 78 cents, or 0.7 percent, to $105.75, the highest settlement since Sept. 26, 2008. Brent oil for May settlement slipped 4 cents to $115.51 a barrel on the London-based ICE Futures Europe exchange.
Brent’s premium to Nymex-traded West Texas Intermediate crude narrowed for a fifth day. The spread between the two May contracts was $9.05 a barrel, compared with $9.80 at yesterday’s close, according to exchange data compiled by Bloomberg.
Portuguese Prime Minister Jose Socrates tendered his resignation after plans to cut the budget were rejected by parliament, pushing the country closer to a bailout.
German Chancellor Angela Merkel called for a boycott of Libyan oil as a way to stop finance flows to the regime of Muammar Qaddafi.
There should be “no more oil exports from Libya to European countries,” Merkel told lawmakers today in Berlin in a speech on the European Union summit beginning today. Germany supports the goals of the current military intervention, which it abstained from approving in the United Nations, she said.
U.S. crude inventories rose for a third week, climbing to 352.8 million in the seven days ended March 18, Energy Department data yesterday showed. Gasoline stockpiles fell 5.32 million barrels to 219.7 million, the lowest level since December. Supplies were forecast to decline by 2 million barrels, according to the Bloomberg survey of analysts.
Total fuel demand increased 1 percent to 19.3 million barrels a day, the Energy Department report showed. Gasoline consumption climbed 2.8 percent to 9.07 million barrels a day.
“We’re definitely seeing a rise in gasoline demand, it’s not as bearish as WTI stocks,” said Mark Keenan, chief investment officer of Cubit Asset Management Pte in Singapore.
Cushing Supplies Grow
Crude inventories climbed 2.13 million barrels to 352.8 million, the Energy Department said. Supplies were forecast to increase 1.5 million barrels, a Bloomberg News survey showed.
Stockpiles at Cushing, Oklahoma, the delivery point for West Texas oil, rose 177,000 barrels to 40.2 million last week, the Energy Department report showed. Supplies increased to 40.3 million in the week ended March 4, the highest since the department began collecting data at the hub in 2004.