Oil traded near the highest in three weeks in New York, heading for a second weekly gain, as investors bet that shrinking stockpiles and signs of economic recovery in the U.S. indicated fuel demand may increase.
Futures advanced earlier after data showed companies in the U.S. added twice as many workers as forecast in June. A Labor Department report today may show employers added 105,000 jobs last month, according to a Bloomberg News survey. Crude supplies fell 889,000 barrels to 358.6 million last week, the lowest level since April, an Energy Department report showed.
“Growth is likely to be a bit healthier in the second half,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicts oil in New York will average $113 a barrel in the third quarter. The ADP data “could mean stronger employment numbers than what the market is expecting, which is good for U.S. growth and oil demand,” he said.
Crude for August delivery gained as much as 30 cents, or 0.3 percent, to $98.97 a barrel in electronic trading on the New York Mercantile Exchange, and was at $98.67 at 12:33 p.m. Sydney time. The contract yesterday climbed $2.02 to $98.67, the highest since June 14. Prices are 3.9 percent higher this week and up 31 percent the past year.
Brent oil for August settlement was at $117.98 a barrel, down 61 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $19.34 to U.S. futures. The difference reached a record $22.29 on June 15.
Stockpiles of crude at Cushing, Oklahoma, the delivery point for West Texas Intermediate oil, the grade traded in New York, slipped 460,000 barrels to 37 million barrels last week, the Energy Department report showed.
A 2.5 million-barrel decline in total U.S. crude supplies was projected for last week, according to the median estimate of 15 analysts surveyed by Bloomberg News. The U.S. is the world’s biggest consumer of the commodity.
Gasoline inventories decreased 634,000 barrels last week to 212.5 million, the report showed. They were forecast to fall 150,000 barrels, according to the survey. Distillate-fuel supplies, a category that includes heating oil and diesel, dropped 191,000 barrels to 142.1 million.
“The DOE report had bullish headline factors, but it was hardly as bullish as prices would suggest,” Peter Beutel, president of Cameron Hanover Inc., an energy adviser in New Canaan, Connecticut, said in an e-mailed note. “This market now has such powerful upward momentum behind it that everything is coming up bullish.”
U.S. companies added 157,000 workers in June, according to data from ADP Employer Services. An increase of 70,000 was projected, according to the median forecast by Bloomberg News.
The U.S. added 105,000 jobs in June, almost double the 54,000 created a month earlier, according to the median estimate in a Bloomberg News survey before a Labor Department report today. Private hiring climbed 125,000 last month, while the jobless rate held at 9.1 percent, the survey showed.
Industrial production in Germany, Europe’s largest economy, increased more than economists forecast in May, led by rising output of investment goods such as machines. Production jumped 1.2 percent from April, when it fell a revised 0.8 percent, the Economy Ministry in Berlin said yesterday. Economists forecast a gain of 0.8 percent in a Bloomberg News survey showed.