WTI Trades Near Three-Week High on Signs of U.S. Growth

West Texas Intermediate climbed to its highest intraday level in 10 weeks on signs of economic recovery in the U.S., the world’s largest consumer of crude, and concern that Middle East exports may be disrupted.

WTI advanced to the highest since April 2 and is set for a second weekly gain. U.S. retail sales rose the most in three months in May, while jobless claims dropped last week, data yesterday show. Iranians go to the polls today to select a replacement for President Mahmoud Ahmadinejad. The U.S. will provide small arms and ammunition to the Syrian opposition after saying that President Bashar al-Assad’s forces used chemical weapons, said an official familiar with the decision.

“The U.S. recovery has been consistent for a while now,” said Guy Wolf, global head of market analytics at Marex Spectron Group in London. “It’s not booming, but it is sustained. Oil prices are reasonably well supported at these levels. However, markets have been wedded to stimulus for some time now.”

WTI for July delivery climbed as much as 61 cents to $97.30 a barrel in electronic trading on the New York Mercantile Exchange and was at $97.04 as of 11:58 a.m. London time. The volume of all futures traded was 3 percent above the 100-day average. The contract gained 81 cents, or 0.8 percent, to $96.69 yesterday, the highest settlement since May 20. Prices are up 1 percent this week.

Brent for August settlement was up 35 cents at $105.30 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $8.01 to WTI for the same month. The July North Sea contract expired yesterday.

Syrian Aid

President Barack Obama is authorizing lethal military aid to rebel groups in Syria under a classified order instructing the Central Intelligence Agency to arrange delivery of the weapons, according to a U.S. official familiar with the decision who asked not to be identified discussing the move. Assad has received support from allies including Iran, holder of the world’s fourth-largest oil reserves.

Opinion polls show Iranian voters want a presidential candidate who will secure an end to the sanctions imposed to halt the country’s nuclear program. The U.S. and Israel say the Persian Gulf nation is secretly pursuing an atomic weapons capability, while Iran says the program is for civilian energy and medical research.

Iran Embargo

Iran, sixth-biggest producer in the Organization of Petroleum Exporting Countries, gets most of its revenue from oil sales. Diminished exports due to the embargo cost the country $3 billion to $5 billion a month, Wendy Sherman, U.S. Undersecretary of State for political affairs, told the Senate Banking Committee in testimony June 4.

The U.S. tightened sanctions against the Islamic republic on Dec. 31, 2011. Iran’s crude production dropped to 2.5 million barrels a day last month, down from 3.58 million in December 2011, estimates compiled by Bloomberg show.

Oil prices rose yesterday after Commerce Department figures showed U.S. retail sales climbed 0.6 percent last month, following a 0.1 percent increase in April. The number of claims for jobless benefits fell by 12,000 to 334,000 in the week ended June 8, the Labor Department reported.

WTI may drop next week amid rising U.S. crude supplies and speculation that the Fed may curb its program of bond purchases, according to a Bloomberg News survey. Eighteen of 33 analysts and traders, or 55 percent, forecast that prices will fall through June 21. Seven respondents, or 21 percent, predicted an increase. Eight projected no change. Crude inventories increased by 2.52 million barrels last week, Energy Information Administration data published June 12.

“Demand is fairly weak, so any supply disruptions that we’ve seen haven’t helped tighten the market,” Amrita Sen, chief oil market analyst at London-based consulting company Energy Aspects Ltd., said in interview on Bloomberg Television’s “Surveillance” with Tom Keene.

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