Crude rises from four-month low on signals that losses excessive

Jobless Claims

U.S. claims for jobless benefits were little changed, signaling the labor market in the biggest oil-consuming nation is stabilizing. First-time U.S. unemployment claims climbed by 4,000 to 352,000 in the week ended April 13, the Labor Department said today.

“The success of the Spanish bond auction came as a relief,” said John Kilduff, a partner at Again Capital LLC, a New York energy hedge fund. “The U.S. jobless numbers stabilized, which is a positive signal.”

Futures retreated earlier as the index of U.S. leading indicators declined for the first time in seven months, a sign the world’s largest economy will cool. The Conference Board’s gauge of the outlook for the next three to six months fell 0.1% in March.

U.S. Stockpiles

U.S. crude supplies climbed to 388.9 million barrels in the week ended April 5, the highest level since July 1990, according to the Energy Information Administration. Inventories gained in April during the past 13 years, data from the EIA, Energy Department’s statistical arm, show. Stockpiles rise as refineries end seasonal maintenance programs, and prepare to boost output of gasoline for the summer months.

“Traders are taking a step back and trying to assess whether the move lower has run its course,” said Michael Wittner, the head of oil-market research at Societe Generale SA in New York. “We’ve already had a big drop in prices based on seasonal weakness of fundamentals.”

The Organization of Petroleum Exporting Countries has no plans for an emergency meeting, two OPEC delegates said, asking not to be identified because such discussions are private. An official at OPEC’s Vienna headquarters declined to comment when contacted by phone today. The group’s next scheduled meeting is on May 31.

Iranian Comments

Iranian Oil Minister Rostam Qasemi said yesterday that negotiations would be held with other OPEC members to hold an emergency meeting should prices drop below $100, without specifying which grade of oil, according to state-run Press TV.

“If oil were to fall further you would expect action from OPEC,” O’Grady said. “The Iranian statement makes clear that lower prices would prompt an emergency meeting.”

Implied volatility for at-the-money WTI options expiring in June was 25.4%, down from 28% yesterday.

Electronic trading volume on the Nymex was 702,990 contracts as of 3:45 p.m. It totaled 758,985 contracts yesterday, 29% above the three-month average. Open interest was 1.76 million contracts.

Bloomberg News

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