West Texas Intermediate oil traded near a one-month high as tension eased over a bank tax in Cyprus that threatens to worsen Europe’s debt crisis. A report today may show U.S. crude supplies rose to the most since June.
Futures were little changed in New York. Prices rebounded yesterday from an intraday drop of as much as 1.8 percent after European policy makers signaled flexibility on a savings levy linked to a bailout for Cyprus. U.S. crude supplies probably rose for a ninth week, the longest run of increases since May, a Bloomberg News survey showed before an Energy Department report tomorrow. Crude at about $100 a barrel is “reasonable” and won’t choke global economic growth, Saudi Arabian Oil Minister Ali Al-Naimi said yesterday.
“We’re seeing supply in the U.S. increasing but we haven’t seen any real positive move in demand,” said David Lennox, an analyst at Fat Prophets in Sydney. “There hasn’t been any significant change in the driving factors for the oil market.”
WTI for April delivery, which expires tomorrow, gained 6 cents to $93.80 a barrel in electronic trading on the New York Mercantile Exchange and at 12:57 p.m. Sydney time. The more- active May future rose 7 cents to $94.18. The volume of all futures traded was 18 percent below the 100-day average. The contract climbed 29 cents to $93.74 yesterday, the highest close since Feb. 20.
Brent for May settlement slid 27 cents to $109.24 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $15.08 to WTI futures for the same month. It closed at $15.40 yesterday, the narrowest differential since Jan. 17.
Oil in New York has technical resistance along its middle Bollinger Band, around $93.80 a barrel today, according to data compiled by Bloomberg. Futures have halted intraday advances near this indicator the past two days, showing it’s where sell orders may be clustered. A breach of chart resistance at settlement signals further price increases may be sustained.
“Saudi Arabia does not set the price” of oil, Al-Naimi said in speech delivered yesterday in Hong Kong. “The market sets the price. That said, I’m sure current levels will not deter further economic growth in Asia.”
Oil recovered as European officials said Cyprus can ease the terms of the levy on bank deposits that aims to raise 5.8 billion euros ($7.6 billion) as part of a rescue package. Public outrage over the tax threatens to derail the nation’s bailout and extend a European recession.
U.S. crude inventories probably climbed by 2 million barrels to 386 million in the seven days ended March 15, according to the median estimate of seven analysts in the Bloomberg survey. Gasoline supplies probably fell by 2 million barrels, the survey shows.
The industry-funded American Petroleum Institute is scheduled to release separate inventory data 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 Energy Information Administration, the Energy Department’s statistics unit, for its weekly survey.
Retail gasoline prices in the U.S. fell to an average $3.696 a gallon, a one-month low, according to data on the EIA’s website. This compares with $3.71 a week earlier.
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