West Texas Intermediate oil was little changed following its longest rally in 3 1/2 months before data expected to show an increase in U.S. employment.
Futures fell 3 cents in New York after climbing 0.1 percent earlier. They advanced a fifth day yesterday, the longest increase since August, after the Census Bureau said U.S. gross domestic product expanded at a 3.6 percent annual rate in the third quarter. Employers probably added 185,000 workers to non-farm payrolls last month and unemployment slid to match a five-year low, economists said before separate data to be published by the Labor Department today.
“The U.S. non-farm payroll data will be the impetus for the oil market today,” Torbjorn Kjus, an Oslo-based senior oil analyst at DnB Markets, said by phone. “We won’t see much action before the figures are out.”
WTI for January delivery was at $97.35 a barrel in electronic trading on the New York Mercantile Exchange, at 1:17 p.m. London time. The contract increased 18 cents to $97.38 yesterday, the highest close since Oct. 29. The volume of all futures traded was about 39 percent below the 100-day average. Prices gained 5 percent so far this week, the most since July 5.
Brent for January settlement advanced 34 cents to $111.32 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $13.97 to WTI. The spread was $13.60 yesterday, the narrowest based on closing prices since Nov. 19.
Goldman Sachs’s commodity research analysts “will be looking for visibility on key geopolitical risks for opportunities to initiate short positions in oil,” the bank said in an e-mailed note. While there are “significant downside risks” to its Brent forecasts during 2014, Goldman Sachs currently kept its $105 prediction at the end of next year and $106 in 2015, according to the note.
The U.S. economy’s GDP growth in the third quarter was the strongest since the first three months of 2012 and exceeded a median forecast of 3.1 percent in a Bloomberg News survey. As the world’s largest oil consumer, the U.S. will account for about 21 percent of global demand this year, according to the Paris-based International Energy Agency.
U.S. crude inventories declined for the first time in 11 weeks, government data showed this week. Stockpiles fell by 5.59 million barrels to 385.8 million last week as U.S. refiners boosted processing, according to an Energy Information Administration report on Dec. 4. Supplies were projected to drop by 500,000 barrels.
WTI’s rally may stall along the 200-day moving average, said Ric Spooner, a chief analyst at CMC Markets in Sydney, who predicts investors may sell West Texas contracts as prices approach $100 a barrel. The moving average is at about $98.51 a barrel today, data compiled by Bloomberg show. Investors sometimes sell contracts when prices approach technical resistance levels.
Crude may decline next week amid ample U.S. inventories and rising production, according to another Bloomberg survey. Fifteen of 25 analysts and traders, or 60 percent, predicted WTI will decrease through Dec. 13. Six respondents estimated futures will climb and four said there’d be little change.
TransCanada Corp. told shippers yesterday that the Gulf Coast portion of its Keystone pipeline won’t be in service before mid-January, three days after it said in a letter to regulators that it anticipated starting on Jan. 3.
The pipeline section has the capacity to carry 700,000 barrels a day of crude to Port Arthur, Texas. It is one of several links that can potentially drain a glut of crude at Cushing, Oklahoma, the nation’s biggest oil-storage hub and delivery point for WTI futures.