WTI at Near One-Week Low as Supplies Rise to 82-Year HighGrant Smith
Brent crude gained for the first time in three days, reversing an earlier loss, as the European Central Bank cut interest rates to a record low.
Brent futures advanced as much as 1.1 percent. ECB policy makers meeting today in Bratislava, Slovakia, lowered the main refinancing rate to 0.5 percent from 0.75 percent, as predicted by 45 of 70 economists in a Bloomberg News survey. Prices fell earlier after U.S. government data yesterday showed the nation’s crude stockpiles climbed to the highest level in 82 years.
“The situation in Europe is not dangerous any more, but it’s still far from being out of the woods,” said Andy Sommer, a senior oil analyst at Axpo Trading AG in Dietikon, Switzerland, who predicts that Brent will remain at $100 a barrel this month.
Brent for June settlement climbed as much as $1.14 to $101.09 a barrel on the London-based ICE Futures Europe exchange, and traded for $100.66 as of 1:19 p.m. local time. The European benchmark grade was at a premium of $9.27 to West Texas Intermediate. The spread closed at $8.91 on April 30, the narrowest settlement since December 2011.
WTI for June delivery was at $91.31 a barrel, up 28 cents, in electronic trading on the New York Mercantile Exchange. The volume of all contracts traded was 18 percent above the 100-day average. It fell $2.43 yesterday to $91.03, the biggest decline since April 15 and the lowest closing price since April 23.
Crude inventories rose by 6.7 million barrels last week to 395.3 million, the U.S. Energy Information Administration said yesterday. Supplies were last at that level in 1931, based on monthly figures. Stockpiles were projected to increase 1.1 million barrels, according to a Bloomberg News survey.
ECB President Mario Draghi will hold a press conference at 1:30 p.m. London time in Bratislava. Draghi said on April 4 he stands ready to act if Europe’s economic outlook worsens.
Price trends over the last two years suggest that crude may be supported at current levels, Helge Lund, chief executive officer of Statoil ASA, said today in a telephone interview.
“There has been some sort of resistance at the level we see now, despite the weakness in the world economy,” Lund said. “It seems that around the level we have seen in the last few weeks and months it is the same sort of level we can perhaps anticipate over the next year or so.”