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WTI Fluctuates Near One-Week High as Stockpiles Seen Shrinking

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May 29 (Bloomberg) -- West Texas Intermediate swung between gains and losses near the highest price in a week before data that may show U.S. crude stockpiles shrank. OPEC will probably keep its output quota unchanged this week.

Futures were little changed in New York after snapping a four-day drop yesterday as U.S. consumer confidence rose to the highest in five years. An Energy Information Administration report tomorrow may show crude supplies slid for a third week, the longest run of declines this year, according to a Bloomberg News survey. The Organization of Petroleum Exporting Countries will maintain its production quota at 30 million barrels a day on May 31 in Vienna, said two OPEC delegates who asked not to be identified because the decision isn’t yet final.

“We’ll see what the inventory reports look like during the week and that will tell us just how the U.S. consumer is really traveling,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “The market is also likely to focus on the upcoming OPEC meeting and the early noise coming from there is that there will be no change.”

WTI for July delivery was at $94.63 a barrel, down 38 cents, in electronic trading on the New York Mercantile Exchange at 2:57 p.m. Singapore time. The volume of all futures traded was 32 percent below the 100-day average. The contract climbed 86 cents to $95.01 yesterday. Prices are up 1.2 percent this month after a 3.9 percent loss in April.

Crude Stockpiles

Brent for July settlement was down 24 cents at $103.99 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $9.36 to WTI futures. The spread was $9.22 yesterday, the widest based on closing prices since May 15.

“Oil is likely to stay quite steady,” said Victor Shum, the vice-president at IHS Energy Insight, a consultant in Singapore. “If U.S. inventories turn out to be falling, then that should help support pricing.”

U.S. crude stockpiles probably fell 750,000 barrels last week as refineries bolstered output of gasoline before Memorial Day, the May 27 holiday that marked the start of the peak-demand summer months, according to the median estimate of eight analysts surveyed by Bloomberg.

Gasoline supplies are forecast to have dropped 650,000 barrels last week, the survey shows. Distillate inventories, including heating oil and diesel, probably increased 150,000 barrels. The EIA, the Energy Department’s statistical arm, is scheduled to release its report tomorrow, a day later than usual because of the Memorial Day holiday.

‘Demand is Great’

The American Petroleum Institute in Washington will publish separate inventory data today. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA for its survey.

Saudi Arabia, the world’s largest crude exporter, is content with current conditions in the oil market, according to Ali al-Naimi, the kingdom’s petroleum minister. “Demand is great,” he said yesterday in Vienna.

Brent’s rebound in London is stalling as futures approach technical resistance along the 50-day moving average, according to data compiled by Bloomberg. This indicator, at around $104.22 a barrel today, is close to where prices halted advances last week. Sell orders tend to be clustered near chart-resistance levels.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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