WTI Advances to Nine-Month High as U.S. Stockpiles DropBen Sharples and Lananh Nguyen
West Texas Intermediate crude traded near a nine-month high after an industry report showed U.S. inventories dropped last week.
Futures were little changed after rising as much as 0.6 percent. Crude stockpiles fell by 4.3 million barrels in the week ended June 14, the American Petroleum Institute said. An Energy Information Administration report today may show supplies shrank by 500,000 barrels, according to a Bloomberg News survey. Russian President Vladimir Putin agreed to sign a statement at the Group of Eight summit calling for a “transitional government” in Syria. The U.S. Federal Reserve will release a statement and economic forecasts when its meeting ends today.
“The API offered a little more support,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in an e-mail today. “Geopolitical concerns are also supportive. The long-running conflict in Syria has little fundamental market impact, but it is fears for a spillover to neighboring oil producers that will see jittery Brent trading this summer.”
WTI for July delivery, which expires tomorrow, rose as much as 57 cents to $99.01 a barrel, the highest intraday price since Sept. 17. Futures were at $98.48 in electronic trading on the New York Mercantile Exchange as of 1:49 p.m. London time. The volume of all futures traded was 53 percent above the 100-day average. Prices climbed 67 cents to $98.44 yesterday. The more-active August contract dropped 1 cent to $98.66.
Brent for August settlement increased 28 cents to $106.30 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $7.61 to WTI. It was $7.35 yesterday, the narrowest based on closing prices since January 2011.
“We’ll be watching closely the EIA numbers to see if there are any draw-downs,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “The longer it takes for a resolution in Syria, the greater the chance of contagion.”
U.S. gasoline stockpiles increased by 918,000 barrels last week, the API data showed. The EIA report today may show supplies increased by 750,000 barrels, according to the median estimate of 12 analysts surveyed by Bloomberg. Distillate-fuel inventories, including heating oil and diesel, dropped by 607,000 barrels, the API data showed.
The API collects the information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, the Energy Department’s statistical arm, for its weekly survey.
Putin was isolated among fellow G-8 leaders, including host U.K. Prime Minister David Cameron and U.S. President Barack Obama, for backing President Bashar al-Assad. The text of the statement on Syria called for “a transitional governing body with full executive powers, formed by mutual consent,” while stopping short of calling for Assad’s ouster.
A two-day meeting of the U.S. Federal Open Market Committee ends at 2 p.m. New York time. Fed Chairman Ben Bernanke said in May the central bank could reduce its $85 billion in monthly bond purchases, known as quantitative easing, if there’s sustainable improvement in employment.
WTI “will look for some FOMC momentum to attack $100 a barrel,” Olivier Jakob, managing director of researcher Petromatrix GmbH in Zug, Switzerland, said in a note.
Brent’s advance is stalling after futures failed to breach a technical-resistance level, according to data compiled by Bloomberg. The front-month contract traded yesterday above its 30-day upper Bollinger Band for a second day without settling above it. This indicator is at around $106.20 a barrel today. Sell orders tend to be clustered near chart resistance.