WTI Oil Trades Near Five-Week High; U.S. Crude Stockpiles Gain

By Ben Sharples

West Texas Intermediate oil traded near a five-week high after U.S. economic data signaled growth in the world’s biggest crude consumer. The nation’s stockpiles of the commodity rose, an industry report showed.

Futures were little changed in New York after increasing 1.6 percent yesterday, the most this year, as U.S. durable goods orders and home prices climbed more than economists forecast. Crude inventories advanced 3.7 million barrels last week, the American Petroleum Institute said. An Energy Department report today may show a gain of 1.3 million, according to a Bloomberg News survey of analysts.

“The series of encouraging economic statistics from the U.S. gave the market a boost,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “It fed into some optimism on the demand side for oil. We have now arrived at a technical resistance level for West Texas. It will be a test of oil strength to see if it can keep going significantly past that.”

WTI for May delivery was at $96.08 a barrel, down 26 cents, in electronic trading on the New York Mercantile Exchange at 12:37 p.m. Singapore time. The volume of all futures traded was 38 percent below the 100-day average. The contract climbed $1.53 to $96.34 yesterday, the biggest increase since Dec. 26 and the highest close since Feb. 19.

Brent for May settlement slid 13 cents to $109.23 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $13.15 to WTI futures after closing yesterday at $13.02, the narrowest since July.

Fuel Supplies

U.S. durable goods orders, or bookings for goods meant to last at least three years, climbed 5.7 percent in February, the most since September, according to data from the Commerce Department yesterday. The median forecast of 80 economists surveyed by Bloomberg called for a 3.9 percent increase. Other reports showed sales of new homes in February capped the best two months since 2008 and residential real-estate prices rose in January by the most since June 2006.

Gasoline stockpiles in the U.S. slid 2 million barrels, the API said. They are forecast to decline 1 million barrels, according to the median estimate of 12 analysts in the Bloomberg survey. Distillate inventories, a category that includes heating oil and diesel, fell 1.9 million barrels, compared with a projected 850,000 barrels drop in the survey.

The API 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.

China Fuel

China, the world’s second-biggest oil consumer, changed its mechanism for setting retail fuel prices, implementing a system that may mean gasoline and diesel more closely track changes in refiners’ crude costs.

Price adjustments will be based on the 10-day moving average cost of a basket of crudes, down from 22 days previously, and the threshold for triggering a revision will be abolished, the National Development and Reform Commission said in a statement on its website yesterday. The changes started immediately, it said. The NDRC also cut gasoline and diesel prices for the first time in four months, effective today.

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

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