West Texas Intermediate crude rose as U.S. equities surged after data showed U.S. factory orders exceeded forecasts, signaling increasing economic growth and fuel demand.
Futures advanced for the fifth time in six days as the Commerce Department reported that orders placed with U.S. factories gained the most in five months in February, boosted by a pickup in demand for motor vehicles and commercial aircraft. An Energy Information Administration report tomorrow will probably show stockpiles climbed by 2.05 million barrels last week, according to the median of 12 analyst responses in a Bloomberg survey.
“The U.S. economy is improving and that’s showing up in the strong move in equities,” said John Kilduff, a partner at Again Capital LLC, a New York-based energy hedge fund. “Oil is also getting some support from the improving economic outlook.”
WTI crude oil for May delivery climbed 12 cents to settle at $97.19 a barrel on the New York Mercantile Exchange. The contract dropped as much as 1.2 percent to $95.91 today. The volume of all futures traded was 2.9 percent below the 100-day average for the time of day at 3:40 p.m.
Brent oil for May settlement decreased 39 cents, or 0.4 percent, to end the session at $110.69 a barrel on the London- based ICE Futures Europe exchange. The volume of all futures traded was 18 percent higher than the 100-day average.
The 3 percent gain in bookings for U.S. manufactured goods followed a revised 1 percent decline in January, according to the Commerce Department. The median forecast of 64 economists in a Bloomberg survey called for a 2.9 percent rise. The advance was led by a 5.6 percent surge in demand for durable goods.
The Standard & Poor’s 500 Index climbed 0.3 percent and the Dow Jones Industrial Average gained 0.4 percent at 3:40 p.m.
Brent traded at a $13.50 premium to WTI futures, compared with $14.01 yesterday and $12.79 March 28. The European benchmark’s premium widened yesterday as the shutdown of Exxon Mobil Corp.’s Pegasus pipeline system, which moves oil to Gulf Coast refineries from the central U.S., threatened to exacerbate a regional glut.
“There’s less concern about the impact of the pipeline closure today and as a result the Brent-WTI spread is narrowing,” Kilduff said.