WTI Oil Rises a Second Day; U.S. Crude Stockpiles Seen Gaining

By Winnie Zhu & Ben Sharples 

West Texas Intermediate rose a second day, extending a rebound from a technical support level. U.S. crude stockpiles probably increased from the highest in 22 years, a Bloomberg survey showed before a government report.

Futures gained as much as 0.5 percent in New York after advancing 0.7 percent yesterday, the most in two weeks. Prices capped the biggest weekly decline in six months on April 5, while failing to settle below the 100-day moving average. Oil also climbed after China reported inflation eased more than forecast last month. U.S. crude stockpiles increased by 1.5 million barrels in the seven days through April 5 to 390 million, according to a Bloomberg News survey before data from the Energy Information Administration tomorrow.

“The recent selloff is a little bit overdone,” Sijin Cheng, an analyst with Barclays Plc in Singapore, said by telephone. “Lower than expected China inflation figures definitely make it more hopeful that the government can announce stimulus to boost the economy and increase oil demand.”

WTI for May delivery advanced as much as 46 cents to $93.82 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.65 at 2 p.m. Singapore time. The volume of all futures traded was 22 percent below the 100-day average. The contract increased 66 cents to $93.36 yesterday, the biggest gain since March 26 and the highest close since April 3. Prices dropped 4.7 percent last week.

Brent for May settlement rose 55 cents to $105.21 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $11.56 to WTI futures. The spread ended the session at $11.30 yesterday, the narrowest gap since June 22.

Goldman Recommendation

Investors should buy September 2013 WTI futures and sell Brent contracts for the same month as the spread between the two grades narrows, Goldman Sachs Group Inc. said in a report e- mailed today.

The bank changed its previous recommendation to buy WTI for June 2013 delivery and sell Brent for the same month because weaker production growth in Texas and New Mexico “greatly reduces” the risk that U.S. Gulf Coast refineries face an oversupply of light crude in the second half of the year that would depress WTI prices, it said.

Oil in New York has technical support along its 100-day moving average, about $92.22 a barrel today, according to data compiled by Bloomberg. Futures halted an intraday decline near that indicator for a second day on April 5. Buy orders tend to be clustered close to chart-support levels.

Oil Supplies

Consumer prices in China, the world’s second-biggest crude consumer, rose 2.1 percent in March from a year earlier, the National Bureau of Statistics said today in Beijing. That compares with the 2.5 percent median estimate in a Bloomberg News survey of economists and a 3.2 percent gain in February, the most in 10 months, when spending for the Lunar New Year holiday pushed up prices.

U.S. crude stockpiles may have been boosted last week after Exxon Mobil Corp. shut the Pegasus pipeline, which moves oil from Illinois to Gulf Coast refineries, a separate Bloomberg News survey showed. Supplies were at the highest level since July 1990 the previous week. Exxon hasn’t said when it will restart the line, which was shut March 29 after heavy Canadian crude leaked in Arkansas.

“Crude inventories just keep on building and that means any increase in demand is being met by more than adequate gains in supplies,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney.

Motor Fuel

Gasoline supplies probably fell 1.8 million barrels last week, while distillate inventories, a category that includes heating oil and diesel, probably slid by 1.7 million, according to the median estimate of eight analysts in the Bloomberg survey.

The industry-funded American Petroleum Institute will release separate inventory figures today. 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 EIA, the Energy Department’s statistics unit, for its weekly survey.

Retail gasoline prices in the U.S. dropped to the lowest for this season in three years, the EIA said on its website yesterday. Regular, unleaded gasoline at the pump declined 3.7 cents, or 1 percent, to $3.608 a gallon. Prices fell in every region of the country except for the Rocky Mountain area. Prices have retreated for six straight weeks and are 33.1 cents a gallon below year-earlier levels, according to the EIA.

To contact the reporters on this story: Winnie Zhu in Singapore at wzhu4@bloomberg.net; Ben Sharples in Melbourne at bsharples@bloomberg.net

source

please give me comments thanks