Oil headed for the longest weekly winning streak in 14 months in New York after growth accelerated in China, the world’s second-biggest crude-consuming country.
Prices fluctuated as China’s gross domestic product rose 7.9% in the fourth quarter from a year earlier, compared with 7.4% in the previous period, the National Bureau of Statistics said today. The International Energy Agency raised forecasts for global oil demand this year. The euro fell versus the dollar, reducing crude’s investment appeal.
“The data out of China have been good and people are continuing to be more bullish about the economy,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “The euro is quite weak and that’s pressuring the market.”
West Texas Intermediate crude for February delivery slid 1 cent to $95.48 a barrel at 1:25 p.m. on the New York Mercantile Exchange. Prices have increased 2.1% since Jan. 11, heading for a sixth weekly advance, the longest streak since November 2011.
Brent for March settlement gained 64 cents, or 0.6%, to $111.74 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $15.81 to WTI futures for the same month. The gap was $15.16 yesterday, the narrowest closing level since July 24.
WTI trading volume was 2.8% below the 100-day average. Brent volume was 7.4% above the average.
Chinese Growth
China’s fourth-quarter growth beat the 7.8% median estimate in a Bloomberg survey. The economy expanded 7.8% for the full year, the least in 13 years, according to statistics bureau data, compared with the 7.7% median estimate in the survey.
Growth may pick up to 8.1% this year, according to analysts polled by Bloomberg in December.
Oil advanced to $95.49 yesterday, the highest close since Sept. 17, after U.S. builders broke ground on more houses than forecast and jobless claims dropped to a five-year low.
“We had already priced in a lot of the economic data,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “We’re at a difficult technical level, which will be tough to breach.”
The IEA boosted its 2013 global demand forecast by 240,000 barrels a day today because of stronger growth expectations for China. World consumption will average a record 90.8 million.
‘Tighter’ Market
“All of a sudden, the market looks tighter than we thought,” the Paris-based IEA said in its monthly report.
China will use 390,000 barrels a day, or 4%, more oil this year than in 2012, to reach 10 million a day, according to the adviser to energy-consuming nations.
The euro slipped from near the highest level since February 2012 as Benoit Coeure, a member of the European Central Bank’s executive board, said the ECB has no view on whether banks that tapped its long-term financing facility should repay those funds when that possibility comes up in the next few weeks.
Oil touched an intraday low of $94.91 a barrel after the euro accelerated its decline. Europe’s shared currency dropped as much as 0.7% to $1.328. A weaker euro and stronger dollar reduce dollar-denominated oil’s appeal as an investment alternative.
“The strong dollar probably prompted a little bit of profit-taking,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The market is going to move back and forth on economic indicators.”
Consumer Confidence
The Thomson Reuters/University of Michigan preliminary January consumer sentiment index decreased to 71.3 from 72.9 the prior month. The gauge was projected to climb to 75, according to the median forecast of 74 economists surveyed by Bloomberg.
U.S. oil demand fell to the lowest level in 16 years in 2012 while domestic output surged the most in more than 150 years, the American Petroleum Institute said today.
Total petroleum deliveries, a measure of demand, dropped 2% from 2011 to 18.6 million barrels a day last year, the lowest level since 1996, the industry-funded group said in a monthly report today.
Domestic oil production jumped 779,000 barrels a day in 2012, or 14%, to 6.43 million. That’s the biggest increase since 1859 and the highest level in 15 years, API said.
“There is a sense that supplies are pretty much abundant,” Lynch said.
