West Texas Intermediate crude headed for a third weekly increase, its longest run of gains since May, and is forecast to rise next week in a Bloomberg News survey amid speculation U.S. stimulus measures will continue.
Futures climbed as much as 0.9 percent in New York, and are on course for a 2.3 percent advance this week. U.S. crude stockpiles shrank, a government report showed earlier this week, while Federal Reserve Chairman Ben S. Bernanke called for maintaining bond purchases to revive the economy. Crude inventories fell by 9.87 million barrels last week, the Energy Department said July 10. Iraq halted oil exports on its pipeline to Turkey because of a fault, the North Oil Co. said.
“Investors have been relieved by the fact that quantitative easing will not be unwound as fast as Bernanke had indicated before,” said Hans van Cleef, an energy economist at ABN Amro Bank in Amsterdam. “As long as the Fed doesn’t signal that will change, that will keep prices elevated for the time being.”
WTI for August delivery rose as much as 96 cents to $105.87 a barrel in electronic trading on the New York Mercantile Exchange, and was at $105.60 at 1:35 p.m. London time. The volume of all futures traded was 26 percent above the 100-day average. The contract fell $1.61 yesterday to $104.91.
Brent for August settlement added 57 cents to $108.30 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $2.70 to WTI contracts. The spread was $1.99 on July 10, the narrowest differential, based on closing prices, since November 2010.
Pumping on Iraq’s pipeline to the Turkish port of Ceyhan will resume in the next few hours as repair teams work near Mosul to fix the line, according to a statement from state-run North Oil. The pipeline has a nameplate capacity of 1.65 million barrels a day, according to the U.S. Energy Department.
Half of 42 analysts and traders polled by Bloomberg News estimated WTI will climb through July 19. Eighteen respondents in the Bloomberg survey, or 43 percent, predicted a drop and three projected no change. Last week, 58 percent in the survey said prices would decline.
WTI slipped earlier today after Chinese Finance Minister Lou Jiwei signaled the world’s second-biggest economy may expand less than the government’s target this year and that growth as low as 6.5 percent may be tolerable in the future.
While the government in March set a 2013 growth goal of 7.5 percent, Lou said he’s confident in achieving a 7 percent rate this year. He spoke yesterday at the U.S.-China Strategic and Economic Dialogue in Washington.
Oil production in non-OPEC countries will increase at the fastest pace in two decades next year, the International Energy Agency said yesterday in its first monthly forecast for 2014.
Supplies from outside the Organization of Petroleum Exporting Countries will increase by 1.3 million barrels a day in 2014 amid booming output in North America, reducing the need for shipments from the producer group, the Paris-based energy adviser said. Global oil consumption will expand by 1.2 million barrels a day in 2014, up from a forecast 930,000 this year, according to the IEA.
“Demand next year will be weak and supply can adequately cope,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “Investors appear to be squaring off after what has been a very good week for the market.”
OPEC, which pumps about 40 percent of the world’s crude, will boost exports by the most this year as summer demand for motor fuels in the Northern Hemisphere peaks, according to Oil Movements. Ten members of the group will ship 24.32 million barrels a day in the four weeks ending July 27, up 630,000 barrels from 23.69 million in the period to June 29, the tanker tracker in Halifax, England, said in an e-mailed report yesterday.