Oil Heading for Longest Run of Weekly Gains in New York Since April 2009
Oil rose in New York, heading for the longest run of weekly gains since April 2009, on speculation that signs of U.S. economic growth and Europe’s steps to contain its debt crisis will boost fuel demand.
Crude climbed as much as 0.5 percent and is poised for a sixth weekly increase. The number of Americans filing applications for unemployment benefits fell to a seven-month low, a Labor Department report showed yesterday. Fuel stockpiles in the U.S., the world’s largest oil consumer, decreased last week, according to an Energy Department report Nov. 9. Italy votes today on austerity measures to clear the way for new leadership, while Greece has formed a unity government.
“There is a lot of uncertainty but due to technical strength, the market may try to test $100 anyway,” said Ken Hasegawa, a commodity-derivatives trading manager at Newedge Group in Tokyo, a broker. “Fundamentally, the world’s inventory of crude and products has been decreasing. That is also a support factor.”
Crude for December delivery rose as much as 49 cents to $98.27 a barrel in electronic trading on the New York Mercantile Exchange. It was at $98.02 at 3:31 p.m. Singapore time. Yesterday, the contract climbed 2.1 percent to $97.78, the highest settlement since July 26. Prices are up 4 percent this week and 7.3 percent in 2011.
Brent crude for December settlement on the London-based ICE Futures Europe exchange was up 4 cents at $113.75 a barrel. The European benchmark contract was at a premium of $15.67 to New York futures, the smallest gap since June 27.
Crude in New York has technical support along its 200-day moving average, around $95 a barrel today, according to data compiled by Bloomberg. That is close to the 50 percent Fibonacci retracement of the drop from this year’s high of $114.83 in May to the low of $74.95 in October. Buy orders tend to be clustered near chart-support levels.
Oil’s rise above $95 a barrel this week was “the key point” that may determine if futures will trade in triple digits, according to Hasegawa. Futures last settled higher than $100 on June 9.
“The first target is $100 and it could happen within the next week,” Hasegawa said. U.S. gasoline inventories fell to the lowest since June 2009 and distillate-fuel supplies declined to the lowest since December 2008, the Energy Department report showed.
Crude may fall next week as Europe’s debt crisis damp the outlook for global demand, a Bloomberg News survey showed. Nineteen of 33 analysts and traders, or 58 percent, forecast oil will decline through Nov. 18. Ten, or 30 percent, projected a gain, and four said there will be little change. Last week, 61 percent of those polled predicted a price drop.
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