Oil traded near the highest level in more than three months as Italy started building a new government that may help contain the European debt crisis and Japan reported its first economic growth in a year.
West Texas Intermediate oil was little changed after rising to $99.69 a barrel, the highest level since July 26. Italy’s president offered Mario Monti, a former European Union competition commissioner, the post of prime minister after Silvio Berlusconi resigned. The economy in Japan, Asia’s second-biggest oil user, expanded at an annualized 6 percent rate last quarter, the Cabinet Office said today in Tokyo.
“The change in Italy over the weekend is the main reason for the markets getting a lift,” said Ole Hansen, senior manager of trading advisory at Saxo Bank A/S in Copenhagen. “Oil has had a really good run in the last few weeks.”
Crude for December delivery was at $98.66 a barrel, down 33 cents, in electronic trading on the New York Mercantile Exchange at 9:29 a.m. London time. Prices rose 5 percent last week and have increased for six consecutive weeks, the longest run of gains since April 2009.
Brent oil for December settlement added 6 cents to $114.22 a barrel on the London-based ICE Futures Europe exchange. The more active January contract was down 4 cents at $112.89. December futures, which expire tomorrow, traded at a premium of $15.53 to New York crude, compared with a record $27.88 on Oct. 14. The spread narrowed 14 percent last week.
Return to Growth
Japan’s economic expansion beat the median forecast of 5.9 percent by analysts in a Bloomberg survey. The return to growth after three quarters of contraction was driven by companies including Toyota Motor Corp. making up for lost output from the earthquake in March.
Crude markets are in balance and not oversupplied, ministers from OPEC-member nations Algeria, Iran and Nigeria said yesterday. The Organization of Petroleum Exporting Countries will meet in Vienna on Dec. 14 to decide whether to cut output as Libyan crude production recovers.
Libya, holder of Africa’s largest oil reserves, will pump as much as 800,000 barrels a day by the end of this year, the chairman of state-run National Oil Corp., Nuri Berruien, said yesterday in an interview in Doha. The country produced almost 1.6 million barrels a day in January, before protests against former leader Muammar Qaddafi began.
Crude at $100 to $110 a barrel is fair for producers and consumers alike, Algeria’s Oil Minister Youcef Yousfi told reporters in Doha, Qatar today. Conditions in oil markets are changing rapidly, he said.
Oil has also gained amid signs of rising political tension in the Middle East. Iran, OPEC’s second-biggest oil producer, continued working on nuclear weapons at least until last year, United Nations inspectors said in a report Nov. 8. Iran’s President Mahmoud Ahmadinejad said Nov. 9 that the nation won’t withdraw “an iota” from its atomic program.
Syria called for an emergency Arab League summit after the organization suspended the country, the official Syrian Arab News Agency reported, citing an unidentified government official. President Bashar al-Assad’s government has continued its crackdown against demonstrators, killing 28 protesters yesterday, according to Al Jazeera television.
The U.S. Commodity Futures Trading Commission will release its weekly Commitments of Traders report today because of a federal holiday on Nov. 11, according to a notice on its website.