Oil traded near its highest in a week in New York as concern that political tension in the Middle East may curb crude exports countered signs that supplies are building up as the global recovery falters.
Futures were little changed, having surged 3.4 percent yesterday after the Turkish army fired on Syrian artillery units and tanks for a sixth day, and U.S. President Barack Obama signed an executive order approving a framework for tighter sanctions on Iran. U.S. crude inventories probably rose 1.5 million barrels last week, according to a Bloomberg News survey before an Energy Department report tomorrow. The American Petroleum Institute will release separate data later today.
“Clearly we have some additional bullish influence from Syria and events in Iran,” said Filip Petersson, a commodities strategist at SEB AB in Stockholm, who predicts Brent crude will average $110 a barrel this quarter. “There’s upside risk on the geopolitical side, but then of course there are headwinds from slowing growth.”
Crude for November delivery was at $92.34 a barrel, 5 cents lower in electronic trading on the New York Mercantile Exchange as of 1:32 p.m. London time. The contract rallied $3.06 yesterday to $92.39, the highest close since Oct. 1. Prices are down 6.6 percent this year.
Brent for November settlement on the London-based ICE Futures Europe exchange slipped 12 cents to $114.38 a barrel. The European benchmark crude was at a premium of $22.04 to New York-traded West Texas Intermediate. The spread was $22.49 on Oct. 8, the widest gap based on closing prices since October 2011.
Oil is declining in New York after reaching technical resistance along its middle Bollinger Band, according to data compiled by Bloomberg. Futures yesterday halted their advance near this indicator, at around $92.93 a barrel today. Sell orders tend to be clustered near chart-resistance levels.
The Organization of Petroleum Exporting Countries boosted estimates of the amount of crude it will need to supply next year after trimming forecasts for oil production from outside the group.
OPEC said in a monthly report that its 12 members will need to provide an average of 29.8 million barrels of crude a day in 2013, about 200,000 more than estimated last month. The group reduced its forecast for non-OPEC output for next year by the same amount, to 53.89 million barrels a day, because of lower-than-expected growth in emerging nations. Still, world markets will remain “characterized by high volumes of crude supply and increasing production capacity,” the organization said.
Saudi Arabia, the world’s biggest crude exporter, wants to see Brent closer to $100 a barrel, Oil Minister Ali al-Naimi told reporters in Riyadh yesterday before a conference of oil ministers from the Gulf Cooperation Council. The six countries in the council accounted for 24 percent of the world’s crude supplies last year, according to BP Plc’s Statistical Review of World Energy.
Oil surged yesterday after Turkish guns fired on Syrian artillery units and tanks for a sixth day. The attacks follow the deaths of five people struck by a Syrian shell in Turkey on Oct. 3. Tension between the two countries has risen with the 19-month rebellion against Syrian President Bashar al-Assad’s government, as Turkey has offered support for the rebels.
U.K. Foreign Secretary William Hague told Sky News that the many countries are looking at increasing sanctions against Iran over its nuclear program. Iran is facing restrictions on its energy exports imposed by Western countries that allege it is building atomic weapons.
U.S. gasoline stockpiles rose 375,000 barrels last week, according to the median estimate of 10 analysts surveyed ahead of the Energy Department report. Distillate-fuel supplies, a category that includes heating oil and diesel, probably fell 250,000 barrels. The department is releasing the data a day later than usual because of the Columbus Day holiday on Oct. 8.
Gasoline traded on Nymex rose 2.3 percent to $2.9865 a gallon yesterday as U.S. refinery shutdowns threatened supplies, boosting spot values in New York Harbor and sending California pump prices to record highs. Futures for November delivery were at $2.968 a gallon today.
Immediate-delivery gasoline in New York Harbor traded at 24.5 cents above futures yesterday, the most for this time of year in at least a decade. The motor fuel slid to $4.666 a gallon at the pump in California, according to AAA, the largest U.S. motoring organization.
In Rotterdam, Royal Dutch Shell Plc’s Pernis refinery is flaring gases after a failure in the plant’s catalytic cracker unit, an environment agency said on its website.