Oil trades near six-week high as U.S. crude supplies decline

Crude stockpiles shrank by 7.5 million barrels last week

West Texas Intermediate traded near the highest price since October after industry data showed crude inventories declined for a second week in the U.S., the world’s biggest oilconsumer.

Futures fluctuated in New York after rising 1.2 percent yesterday. Crude stockpiles shrank by 7.5 million barrels last week, a report from the American Petroleum Institute showed yesterday. Government data today is forecast to show supplies dropped by 3 million, according to a Bloomberg News survey. In Libya, three eastern ports will reopen Dec. 15, said the head of the country’s energy-protection force.

“The run of inventory increases had the market rattled, but it now appears to be reversing and the focus is coming back to global growth numbers,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney. “The outlook is for a test of higher levels for crude.”

WTI for January delivery was at $98.43 a barrel in electronic trading on the New York Mercantile Exchange, down 8 cents, at 11:31 a.m. Singapore time. The contract climbed $1.17 to $98.51 yesterday, the highest close since Oct. 28. The volume of all futures traded was about 10 percent above the 100-day average. Prices have gained 7.2 percent this year.

Brent for January settlement slid 7 cents to $109.31 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $10.88 to WTI. The spread was $10.87 yesterday, the narrowest since Nov. 8 based on closing prices.

Fuel Supplies

WTI advanced 5.3 percent last week, the most in five months, as U.S. crude inventories fell for the first time in 11 weeks and TransCanada Corp. announced plans to start part of its Keystone pipeline to the Gulf Coast from Cushing, Oklahoma, the delivery point for Nymex futures.

U.S. gasoline stockpiles increased by 6.27 million barrels in the seven days through Dec. 6, the API data shows. The Energy Information Administration will probably report a gain of 2 million, according to the median estimate of 10 analysts in the Bloomberg survey.

Distillate supplies, including heating oil and diesel, rose by 1.18 million barrels, the API said. They’re projected to have climbed by 1.55 million in the report from the EIA, the Energy Department’s statistical arm.

Refinery utilization probably rose by 0.5 percentage points to 92.9 percent of capacity, the fastest rate since July 2012, according to the survey. The API in Washington collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA.

Libyan Output

Brent, the benchmark grade for half the world’s oil, advanced for a second month in November as unrest in Libya curbed production. The nation is a member of the Organization of Petroleum Exporting Countries and the holder of Africa’s largest oil reserves.

The Libyan ports of Es Sider and Ras Lanuf, with a combined capacity of 600,000 barrels a day, and a third port, Zueitina, will restart this month, Brigadier Idris Bukhamada, the head of the Petroleum Facilities Guard, said by phone from Ajdabiya yesterday. Ibrahim Al Jedran, a former regional PFG commander whose men blockaded five terminals starting July 28, agreed to the resumption after intervention by the Al Magharba tribe, according to Bukhamada.

www.bloomberg.com

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