Oil traded near its highest price in 10 days in New York as signs of an improving economy in the U.S., the world’s biggest crude consumer, stoked speculation that demand for fuel may increase.
Futures for June delivery climbed as much as 0.9 percent as the dollar slumped to a 15-month low against the euro and equity markets rallied after Apple Inc.’s profit beat projections. The Energy Department reported an unexpected drop in U.S. crude supplies and a decline in gasoline supplies yesterday. Prices trimmed gains today after a U.S. report showed a smaller-than forecast decline in initial jobless claims last week.
“Oil’s gaining today from a combination of the strong euro and continuing good news from the stock markets,” said Robert Montefusco, senior broker at Sucden Financial in London. “Yesterday’s Energy Department numbers helped a lot, and we should get a pick-up in demand over the next month as the holidays approach.”
Crude oil for June delivery gained as much as $1.03 to $112.48 a barrel in electronic trading on the New York Mercantile Exchange, the highest price since April 11. It was at $111.71 at 1:37 p.m. London time. Brent crude oil for June settlement traded at $123.91 a barrel, up 6 cents, on the ICE Futures Europe exchange in London. Yesterday, it rose $2.52, or 2.1 percent, to end the session at $123.85, the highest close since April 11.
Trading on both platforms will be closed tomorrow for the Easter vacation.
The European benchmark’s premium to U.S. futures narrowed to $12.21 a barrel from $12.40 yesterday. The difference between front-month contracts in London and New York surged to a record $19.54 on Feb. 21. The spread averaged 76 cents last year. The dollar fell as much as 0.9 percent to $1.4649 against the euro in London, the weakest since December 2009.
U.S. crude oil supplies fell 2.32 million barrels to 357 million last week, the first drop since February, the Energy Department said yesterday in a weekly report. Inventories were forecast to increase by 1.3 million barrels, according to the median of 13 analyst estimates in a Bloomberg News survey.
Gasoline stockpiles dropped 1.58 million barrels to 208.1 million, the lowest level since the week ended Nov. 12, the report showed. Stockpiles were forecast to decline by 1.75 million barrels, according to the survey.
“We had better-than-expected earnings yesterday for the technology sector and that supports the idea that demand seems intact despite concerns over higher commodity prices,” said Serene Lim, a commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “The bullish inventory report overnight will bolster the market today.”
Oil has advanced 22 percent in New York this year. Unrest in the Middle East and North Africa has toppled leaders in Egypt and Tunisia and spread to Libya, Algeria, Bahrain, Iran, Oman, Syria and Yemen. Libyan crude output, which averaged 1.6 million barrels a day last year, fell to 390,000 barrels a day in March, according to a Bloomberg News survey.
At least 153 people died across northern Nigeria in riots by supporters of opposition candidate Muhammadu Buhari, who lost the April 16 presidential vote in Africa’s top oil-producing country, a civil rights group said yesterday. Attacks by armed groups cut more than 28 percent of the country’s output between 2006 and 2009, according to data compiled by Bloomberg News.