West Texas Intermediate climbed for a fourth day as U.S. refiners boosted crude processing to the highest rate this year and industrial profits increased in China, the world’s second-largest oil consumer.
Futures gained as much as 0.7 percent in New York to post the longest rising streak since May 20. U.S. refineries operated at 90.2 percent of combined capacity last week even as stockpiles rose, government data showed yesterday. Profit at Chinese industrial companies was up 16 percent in May from a year earlier, according to China’s National Bureau of Statistics today. WTI breached a technical-resistance level that capped price gains the past week.
“We have spent the last four days recovering what was lost in two days last week,” Ole Hansen, the head of commodity strategy at Saxo Bank A/S, said by telephone from Copenhagen. “The oil market is returning to the focus of before last week’s sell-off, which is the increase in demand with refiners returning from maintenance and ramping up runs.”
WTI for August delivery rose as much as 64 cents to $96.14 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.92 at 1:36 p.m. London time. The contract climbed 0.2 percent to $95.50 yesterday, the highest close since June 19. Futures have declined 1.3 percent in the second quarter.
Brent for August settlement increased as much as 82 cents, or 0.8 percent, to $102.48 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $6.35 to WTI futures, from $6.16 yesterday. The volume traded was 32 percent below the 100-day average.
U.S. refiners boosted operating rates by 0.9 percentage point in the week ended June 21, the Energy Information Administration, the Energy Department’s statistical arm, said in a report yesterday.
Processing units are often restarted late in the spring, after being idled for maintenance in winter, as attention moves away from heating oil and before the peak season for U.S. gasoline demand. The so-called summer driving season runs from late May to early September.
U.S. crude stockpiles gained by 18,000 barrels to 394.1 million, the EIA data shows. Supplies were forecast to drop by 1.75 million barrels, according to the median estimate of 12 analysts in a Bloomberg News survey.
Gasoline inventories rose 3.7 million barrels last week, the data show. They were projected to climb by 875,000 barrels, according to the survey. Distillate supplies were up 1.6 million barrels, compared with a forecast 650,000-barrel increase.
“Inventories are staying stubbornly high as we move into the driving season, so that’s a negative development,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney.
The U.S. was the biggest oil user last year, accounting for 21 percent of global demand, according to BP Plc’s Statistical Review of World Energy. China consumed 11 percent.
WTI is extending its rally after futures breached technical resistance, according to data compiled by Bloomberg. The August contract yesterday settled above its 30-day middle Bollinger Band for the first since June 19. Investors typically buy contracts when chart resistance fails.
U.S. crude prices have gained 4.3 percent in June on renewed concern that the fighting in Syria will spread and threaten Middle Eastern oil supplies. The U.S. plans to arm Syrian rebels within a month, the Wall Street Journal reported yesterday, citing diplomats and officials briefed on the plan.
The U.S. and 10 other countries pledged June 22 to expand support for Syria’s rebel forces, without providing details. The Central Intelligence Agency has begun moving weapons to Jordan from a network of secret warehouses, according to the Journal.
Iran’s President-elect Hassan Rohani will not change the Persian Gulf nation’s policy of supporting Bashar al-Assad in Syria’s civil war, Ahmad Bakhshayesh, a member of the Iranian parliament, said yesterday by phone from Tehran.
Japan’s crude imports from Iran more than doubled in May from a year earlier despite sanctions against the Persian Gulf country. Imports rose to about 222,000 barrels a day, according to data today from Japan’s Ministry of Finance. A sustained increase on a quarterly or annual basis is unlikely because Japanese buyers can find alternate supplies, said Osamu Fujisawa, an independent energy economist in Tokyo who worked for Saudi Arabian Oil Co. and Showa Shell Sekiyu K.K.
Russia plans to ship less than a million barrels a day of Urals crude from the Baltic port of Primorsk for a second month, little changed from June, which was the lowest in more than five years, a preliminary loading program showed. In addition, several tankers are waiting at Primorsk after loading was halted because of a tug boat dispute, Igor Dyomin, a spokesman for OAO Transneft, said today by phone.