Oil climbed to the highest intraday price in more than a week in New York on speculation central banks will take more steps to boost economic growth, spurring demand for raw materials.
Futures gained as much as 0.9 percent from the Aug. 31 close. China should “decisively” expand the strength of its fine-tuning after changes in the economy and markets, the official People’s Daily newspaper said in a front-page essay yesterday. European Central Bank President Mario Draghi told officials he would be comfortable buying three-year government bonds to cut borrowing costs for nations in financial distress. The U.S. Energy Department will release its weekly report on oil stockpiles and demand Sept. 6.
“There is a lot of talk about stimulus and that’s keeping prices high,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney, who predicts New York crude has resistance at $98.50 a barrel. “I’m looking for a lift in inventories.”
Oil for October delivery increased as much as 88 cents to $97.35 a barrel in electronic trading on the New York Mercantile Exchange, the highest intraday price since Aug. 27, and was at $97.02 at 3:06 p.m. Singapore time. There was no floor trading yesterday because of the U.S. Labor Day holiday and transactions since the Aug. 31 close will be booked with today’s trades for settlement. Prices are 1.8 percent lower this year.
Brent oil for October settlement rose 21 cents, or 0.2 percent, to $115.99 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate was at $18.92, from $18.10 on Aug. 31.
Oil has technical support at $95.76 a barrel, along the bottom of an uptrend channel on the daily chart, according to data compiled by Bloomberg. This channel started from $77.28, the 2012 intraday low traded on June 28. Buy orders tend to be clustered near chart-support levels.
Draghi may unveil details of his bond-purchase program when he holds his first press conference after the summer break on Sept. 6. He told lawmakers in a closed-door meeting yesterday that purchasing short-dated bonds doesn’t constitute state financing, according to Jean-Paul Gauzes, a member of the European Parliament.
European Union President Herman Van Rompuy is traveling to Berlin for talks with German Chancellor Angela Merkel today as Italian Prime Minister Mario Monti welcomes French President Francois Hollande to Rome. U.S. Federal Reserve Chairman Ben S. Bernanke said Aug. 31 that he wouldn’t rule out more stimulus.
The U.S. Energy Department report will be released a day late this week because of Labor Day. The holiday marks the end of the U.S. summer driving season, the peak demand period for gasoline. Refiners often idle processing units for maintenance in September and October as consumption of the motor fuel drops and before heating-oil use increases.
About 58 percent of oil output and 39 percent of natural-gas production from the Gulf of Mexico remained shut because of Hurricane Isaac, a U.S. Bureau of Safety and Environmental Enforcement report yesterday showed. Daily crude capacity was cut by as much as 95 percent as Isaac moved through the Gulf last week.
Tropical Storm Leslie strengthened 585 miles (940 kilometers) south of Bermuda, where it may arrive this weekend as a hurricane, according to the National Hurricane Center. It’s the 12th storm of the Atlantic hurricane season, which runs from June 1 to Nov. 30. Leslie has top winds of 65 miles per hour, up from 60 mph earlier, and was stationary, an advisory at 11 p.m. New York time showed.