Oil rose in New York for the first time in four days on speculation European leaders will push Greece to accept their rescue plan, reducing the chances the region’s debt crisis will worsen and curb economic growth.
Futures rose as much as 1.2 percent, reversing a decline of 1.3 percent, as European leaders prepared to tell Greece there is no alternative to budget cuts in their bailout plan. Gasoline and distillate-fuel stockpiles in the U.S., the world’s biggest oil consumer, probably fell for a fifth week, according to a Bloomberg News survey before an Energy Department report today. Goldman Sachs Group Inc. recommended investors buy long-dated crude futures in New York and London.
“The inventories will be watched even more closely than normal,” said Tobias Merath, head of global commodity research at Credit Suisse AG in Zurich, who forecasts Brent crude will slip to $105 a barrel in three months. “We’re probably going to be in for a period of uncertainty, which isn’t a good harbinger for commodities trading.”
Oil for December delivery climbed as much as $1.14 to $93.33 a barrel in electronic trading on the New York Mercantile Exchange. It was at $93.23 at 12:06 p.m. London time. Yesterday, the contract slid 1.1 percent to $92.19. Prices are up 2 percent this year.
Brent for December settlement on the London-based ICE Futures Europe exchange increased as much as $1.40, or 1.3 percent, to $110.94 a barrel. The European benchmark contract was at $17.43 over New York futures, compared with $16.37 on Oct. 31, the premium’s smallest settlement since June 28.
“The euro-zone issue remains a key factor driving both financial markets and oil markets,” Victor Shum, a senior principal at Purvin & Gertz Inc., a consultant in Singapore, said by phone. “But there are supply-demand issues that in my view support stronger oil prices. From the demand side of the equation, we are likely to see a tightening balance.”
Greek Prime Minister George Papandreou will join European leaders today, according to a statement from French President Nicolas Sarkozy’s office. He will be told that the “only way to resolve Greek debt problems” is through a deal hammered out last week in a six-day, crisis-management marathon. Crude dropped earlier today after Papandreou pledged a referendum on the rescue plan, prompting concern the bailout would unravel.
U.S. gasoline inventories probably declined by 800,000 barrels in the week ended Oct. 28, according to the median estimate of 13 analysts surveyed by Bloomberg News. Distillate-fuel supplies, including heating oil and diesel, are expected to have decreased 1.75 million barrels. Stockpiles in each category have fallen for four weeks.
Yesterday, the American Petroleum Institute said gasoline stockpiles fell 1.1 million barrels and distillates were down 3.4 million. Crude inventories slid 156,000 barrels, according to the industry group. The Energy Department report may show a 1 million-barrel increase, based on the poll.
Goldman Sachs today recommended investors take a “long” position on New York oil contracts for December 2012 as crude stockpiles decline at the delivery hub of Cushing, Oklahoma, and in the Midwest U.S. It also changed its call to buy Brent futures for July 2012, from December 2012 previously.
Oil in New York yesterday rebounded near technical support at $89.84 a barrel, according to data compiled by Bloomberg. On the weekly chart, that’s the 50 percent Fibonacci retracement of the drop to $32.40 in December 2008 from a record high of $147.27 in July that year. Buy orders tend to be clustered near chart-support levels.