WTI Oil Rebounds From 10-Week Low as Brent Pipeline Stays Shut

By Ben Sharples

West Texas Intermediate oil rebounded from the lowest level in 10 weeks and Brent crude gained as a North Sea pipeline system remained shut after a platform leak.

WTI futures climbed as much as 0.4 percent in New York on speculation the past three days of declines may have been excessive. The Brent pipeline system was closed for a third day after an oil leak was discovered March 2 on the Cormorant Alpha platform, according to Abu Dhabi National Energy Co. (TAQA) PJSC, the operator known as Taqa. U.S. crude stockpiles probably advanced for a seventh week, the longest stretch since May, a Bloomberg News survey showed before Energy Department data tomorrow.

“We appear to be temporarily parked around the support of the 200-day moving average on West Texas,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “To be confident about prices holding or rising, we need to see demand increasing.”

WTI for April delivery rose as much as 34 cents to $90.46 a barrel in electronic trading on theNew York Mercantile Exchange and was at $90.31 at 1:27 p.m. Singapore time. The volume of all futures traded was 41 percent below the 100-day average. The contract fell 56 cents to $90.12 yesterday, the lowest close since Dec. 24.

Brent for April settlement on the London-based ICE Futures Europe exchange gained as much as 55 cents, or 0.6 percent, to $110.64 a barrel. The volume of all futures traded was 25 percent above the 100-day average. The European benchmark grade was at a $20.23 premium to WTI, widening for a fourth day.

Brent Pipeline

WTI’s 200-day moving average is at $90.36 a barrel today, according to data compiled by Bloomberg. Futures are rebounding as a technical indicator shows prices have fallen too quickly for further losses to be sustainable. The 14-day relative strength index yesterday dropped below 30 for the first time since June 28, signaling the market is oversold. Today’s reading is around 31.

Production from the 27 North Sea oil fields that make up the Brent system remained shut and there is no estimate yet for when it will resume, the Taqa official, who asked not to be identified because of company policy, said yesterday by phone from Aberdeen, Scotland.

The system normally carries 90,000 barrels a day of crude and accounts for about 10 percent of the U.K.’s oil production. About 10,000 barrels a day were already offline following a similar incident at the same platform on Jan. 14.

Crude Supplies

U.S. crude inventories probably rose 788,000 barrels last week, according to the median estimate of 10 analysts surveyed by Bloomberg. Gasoline stockpiles decreased 250,000 barrelsand distillate supplies slid 1 million barrels, the survey showed.

The American Petroleum Institute is scheduled to release separate supply data today. The industry group collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Information Administration, the Energy Department’s statistics unit, for its weekly survey.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

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