WTI Futures Rebound as U.S. Crude Inventories Decline

West Texas Intermediate advanced in New York amid signs of a reduction in U.S. crude inventories.

Futures gained as much as 1 percent in New York. A government report today will show supplies declined by 800,000 barrels, according to a Bloomberg News survey. The American Petroleum Institute said yesterday that crude stockpiles shrank 7.79 million barrels last week, the most since Dec. 28. The U.S. will today extend waivers from sanctions for nine nations that import Iranian oil, a U.S. official said.

“The big drop in crude inventories in the API report is supporting things,” said Andy Sommer, a senior oil analyst at Axpo Trading AG in Dietikon, Switzerland, who predicts that Brent, the European benchmark, will trade from $100 to $105 a barrel this month. “The market is going to tighten going into the third quarter.”

WTI for July delivery climbed 83 cents, or 0.9 percent, to to $94.14 a barrel at 9:08 a.m. on the New York Mercantile Exchange. The price reached $94.23 at 9:03 a.m. The volume of all futures traded was 28 percent below the 100-day average.

Brent for July settlement was 40 cents higher at $103.64 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $9.50 to WTI. The spread was $9.93 yesterday, the widest based on closing prices since April.

Fuel Supplies

U.S. gasoline stockpiles fell 1.3 million barrels in the week ended May 31, the API said. An Energy Information Administration report today is projected to show supplies rose 1 million barrels, according to the median estimate of 11 analysts in the Bloomberg survey.

Distillate inventories, including heating oil and diesel, increased 241,000 barrels, according to the API data. The EIA, the Energy Department’s statistical arm, will probably report a 1.4 million-barrel gain, the survey shows.

Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI contracts and the biggest oil storage hub in the U.S., dropped 454,000 barrels last week, according to the API data. That was the first decline in four weeks.

The API in Washington collects supply 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 weekly survey.

Iran Sanctions

Sanctions exemptions on Iranian oil imports for China, India, Malaysia, South Korea, Singapore, South Africa, Sri Lanka, Turkey and Taiwan will be extended, according to the U.S. official, who spoke on condition of anonymity because the decision hasn’t been made public.

A December 2011 law cuts off access to the U.S. banking system for any foreign financial institutions that handle oil trading with Iran, unless their home countries have earned a waiver by significantly reducing imports. The measures are intended to pressure the Persian Gulf nation to abandon aspects of its nuclear program, which the U.S. and Israel say are aimed at developing atomic weapons.

Employment data from the U.S. and trade figures from China are scheduled this week.

U.S. employers probably added 167,000 workers last month, according to a Bloomberg News survey of economists before Labor Department data on June 7. China is scheduled to release May import and export figures on June 8.

WTI’s rebound may stall along its middle Bollinger Band, at about $94.40 a barrel today, according to data compiled by Bloomberg. Futures yesterday halted an intraday advance near this indicator for a fourth day, signaling where sell orders may be clustered.

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