West Texas Intermediate crude rose to narrow its discount versus Brent to the lowest level in eight months. The European benchmark was headed for a second weekly decline.
WTI advanced as much as 0.7 percent, paring its first weekly decline in three, as the euro strengthened against the dollar amid speculation the banking crisis in Cyprus will be contained. Cypriot lawmakers start a debate today on ways to unlock bailout funds to avoid a financial collapse. Libya shut two oil fields because of fighting, according to a report yesterday from the state LANA news agency.
“We do not think that risk appetite has necessarily deteriorated,” said Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London, who forecasts that Brent will average $114 a barrel this quarter. “Once the Cyprus issue is resolved and ultimately it will have to be resolved,” crude is likely to strengthen, he said.
WTI for May delivery gained as much as 63 cents to $93.08 a barrel in electronic trading on the New York Mercantile Exchange, and was at $92.84 at 12:38 p.m. London time. The volume of all futures traded was 53 percent below the 100-day average. The contract slid $1.05 to close at $92.45 yesterday. Prices are down 0.7 percent this week.
Brent for May settlement was at $107.63 a barrel, up 16 cents, on the London-based ICE Futures Europe exchange. The volume of all futures traded was 4 percent above the 100-day average for the time of day. The grade has lost 2 percent this week. The European benchmark’s premium to WTI fell as low as $14.57, the narrowest since July.
“Brent is in a weak situation and, on the other side, WTI is rangebound,” said Ken Hasegawa, an energy-trading manager at Newedge Group in Tokyo. “There’s still a lot of uncertainty over the euro-zone debt situation, so we can’t confirm a bottom for Brent crude. It might continue to decline next week.”
Europe’s shared currency climbed against 15 of its 16 major peers with Cypriot lawmakers scheduled to debate legislation to help the country obtain a bailout and stave off financial collapse. Marios Mavrides, a lawmaker with Cyprus President Nicos Anastasiades’s ruling Disy party, said the government must pass the bill to protect the island nation.
The Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s oil, will cut shipments by 0.2 percent through early April as maintenance at refineries in Asia peaks, according to a weekly report from Oil Movements, a tanker tracker.
Exports will fall to 23.72 million barrels a day in the four weeks to April 6, Oil Movements said. The figures exclude Angola and Ecuador. Middle East shipments will drop 0.2 percent to 17.37 million barrels a day in the period, the report also showed. That figure includes non-OPEC members Oman and Yemen.
Cyprus is trying to raise 5.8 billion euros ($7.5 billion) needed to trigger emergency loans from the European Central Bank to avoid a financial crisis. The country became in June the fifth euro-area nation to request a rescue. The European Union accounted for 16 percent of the world’s oil consumption in 2011, BP Plc’s Statistical Review of World Energy shows.
WTI will probably fall next week on concern that slower European growth will weaken the U.S. economy and curb fuel demand, a Bloomberg survey showed. Fifteen of 31 analysts, or 48 percent, forecast crude will drop through March 29. Nine respondents, or 29 percent, predicted a gain. Seven said there would be little change.
Brent has declined this week even as state-run LANA reported that Libya shut oil fields in Zalaa, citing Ahmed al-Mismari, a spokesman for border patrol and oil-facilities guards. Armed clashes took place at an oil field owned by Libya’s Waha Oil Co. this week after unidentified gunmen attacked security forces at the facility, Egypt’s state-run Middle East News reported March 19, citing company officials.
China’s crude stockpiles fell 2.9 percent in February, according to the China Oil, Gas & Petrochemicals newsletter published by the official Xinhua News agency. Inventories slid to 28 million tons, or 205 million barrels, the lowest level in a year, according to Bloomberg calculations based on the data.