Oil Trades Near Two-Day Low as Supply Gain Counters Fed O
Futures were little changed after dropping for the first time in six days yesterday. Protesters attempted to storm the U.S. embassy in Sana’a, Yemen, two days after four people were killed in an attack on an American diplomatic mission in Libya. The Federal Open Market Committee may announce additional stimulus measures at the end of a two-day meeting today. U.S. crude inventory levels unexpectedly rose last week, Energy Department data showed yesterday.
“There is absolutely no room for another disruption in any oil-producing country,” Olivier Jakob, managing director of research group Petromatrix GmbH, said today by telephone from Zug, Switzerland. “There is some more quantitative easing priced in, there is some geopolitical premium priced in. We need to get the FOMC out of the way and then re-focus on the geopolitics or fundamentals.”
Crude for October delivery was at $97.37 a barrel, up 36 cents, in electronic trading on the New York Mercantile Exchange at 1:40 p.m. London time. The contract rose as high as $98.06 yesterday, its strongest since Aug. 23. Front-month prices are down 1.5 percent this year.
Brent oil for October settlement advanced 94 cents to $116.96 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate was at $19.56, from $18.95 yesterday.
Oil in New York has technical resistance along the upper Bollinger Band on the daily chart, at around $99.20 a barrel today, according to data compiled by Bloomberg. Futures have halted advances near this indicator since July. Sell orders tend to be clustered near chart-resistance levels.
Demonstrators in Sana’a breached the U.S. compound’s security perimeter and set two cars ablaze, as security personnel fired into the air to disperse the crowd, said Yousef Al-Ahjan, who joined the rally. One protester was killed and five injured, Al Arabiya television said.
The attack in Libya that killed the U.S. ambassador and three other American personnel bore the hallmarks of al-Qaeda, and may have been carried out by the group’s North Africa affiliate to mark the anniversary of the Sept. 11 attacks on the U.S., said Michigan Republican Representative Mike Rogers, chairman of the House intelligence committee.
Crude inventories climbed by 1.99 million barrels last week, the Energy Department said. They were forecast to fall by 2.9 million barrels, according to a Bloomberg News survey.
U.S. gasoline supplies fell 1.18 million barrels last week, the Energy Department report showed. They were forecast to drop by 1.7 million, according to the survey. Distillate supplies, a category that includes heating oil and diesel, rose 1.48 million barrels, compared with a projected decline of 500,000.
The FOMC will probably announce a third round of bond purchases after its meeting and extend the duration of its zero- interest-rate policy into 2015, according to two-thirds of the economists surveyed by Bloomberg.
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