West Texas Intermediate crude headed for its first weekly gain in a month amid speculation that the budget standoff in the U.S. will be resolved without a debt default that would harm economic growth and fuel demand.
Futures have advanced 0.8 percent this week in New York, and traded little changed today. The U.S. government stoppage is entering its fourth day as lawmakers wrangle over the budget and an increase in the debt limit. BlackRock Inc.’s Laurence D. Fink and Pacific Investment Management Co.’s Bill Gross said the impasse won’t lead to default. Companies including Exxon Mobil Corp. curbed Gulf of Mexico output and evacuated workers as Tropical Storm Karen triggered a hurricane watch.
“People are probably trying to look beyond the current crisis, and feel that it will be over soon,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “However, I would not underestimate the psychological impact.”
WTI for November delivery rose as much as 44 cents to $103.75 a barrel in electronic trading on the New York Mercantile Exchange. It was at $103.68 as of 1:08 p.m. London time. The volume of all futures traded was about 58 percent below the 100-day average.
Brent for November settlement gained as much as 54 cents, or 0.5 percent, to $109.54 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark was at a premium of $5.77 to WTI, compared with $5.69 yesterday.
Brent gained even as Royal Dutch Shell Plc said it removed a force majeure yesterday on Nigerian Bonny Light crude exports after fixing one link of the Trans Niger Pipeline, according to an e-mailed statement. Force majeure is a legal clause excusing a company from meeting its delivery obligations.
WTI will probably decline next week on concern that the political impasse in Washington may damp economic growth and energy demand, a Bloomberg survey showed. Eighteen of 30 analysts and traders, or 60 percent, forecast crude will drop through Oct. 11. Six respondents, or 20 percent, predicted an increase and six said that there would be no change.
President Barack Obama urged House Speaker John Boehner to hold a vote on funding federal operations without strings attached, saying that that would end the crisis. The government will run out of borrowing authority Oct. 17, according to the Treasury, leaving only cash to pay bills.
The congressional dispute will end “very rapidly,” Blackrock’s Fink said yesterday at an event hosted by the UCLA Anderson School of Management at the Beverly Hilton hotel in Beverly Hills, California, and streamed on CNBC.com.
In the Gulf, Karen’s top sustained winds eased to 60 miles (105 kilometers) per hour, down from 65 mph earlier. It was about 295 miles south of the mouth of the Mississippi River and moving north-northwest at 10 mph, the National Hurricane Center in Miami said in an advisory at 4 a.m. New York time. The storm may reach hurricane strength today.
Exxon curtailed output by 1,000 barrels of oil equivalent a day and pulled non-essential personnel from offshore operations in Karen’s path. Anadarko Petroleum Corp. shut and evacuated the Independence Hub and three other platforms in the central and eastern Gulf. BP Plc, Chevron Corp., Enterprise Products Partners LP and Royal Dutch Shell Plc said they were also moving personnel out of the system’s track yesterday.
The region is home to 23 percent of U.S. oil production, 5.6 percent of gas output and more than 45 percent of petroleum refining capacity, according to data from the Energy Information Administration, the Energy Department’s statistical arm.
The release of North Sea crude loading plans for November began with A.P. Moeller-Maersk’s Danske Undergrunds Consortium. There will be 3.6 million barrels, or 120,000 barrels a day, of the DUC grade next month, a program obtained by Bloomberg News showed. Schedules for the four grades that make up the Dated Brent benchmark are due to be released on Oct. 7.