Crude breaks seven-month low

West Texas Intermediate oil rose from a seven-month low amid speculation a government report will show U.S. crude supplies dropped a second week. Brent was steady in London.

Crude supplies probably fell 2.15 million barrels last week, according to a Bloomberg survey before tomorrow’s Energy Information Administration report. Orders for U.S. durable goods jumped in July by the most on record, the Commerce Department reported. Russian President Vladimir Putin began talks with his Ukrainian counterpart, Petro Poroshenko, as tensions flared on the two nations’ border.

“The market is up on expectations supplies will stay tight,” Phil Flynn, a senior market analyst at Price Futures Group in Chicago, said by phone. “The economic data is giving us some support. The durable goods number increases demand expectations.”

WTI (NYMEX:CLV14) for October delivery increased 76 cents, or 0.8%, to $94.11 a barrel at 9:12 a.m. on the New York Mercantile Exchange. Futures dropped 30 cents to $93.35 yesterday, the lowest close since Jan. 14. The volume of all futures traded was 29% below the 100-day average for this time of day.

Brent (NYMEX:SCV14) for October settlement rose 28 cents to $102.93 a barrel on the London-based ICE Futures Europe exchange. Volumes were 39% lower than the 100-day average. The European benchmark crude traded at an $8.82 premium to WTI. The spread closed at $9.30 yesterday, the widest since March 14.

Gasoline Inventories

U.S. gasoline (NYMEX:RBV14) inventories probably dropped by 1.7 million barrels in the week ended Aug. 22, according to the median estimate in the Bloomberg survey of nine analysts. Analysts were split over whether stockpiles of distillate fuel, a category that includes diesel and heating oil, declined or rose.

The American Petroleum Institute in Washington is scheduled to release separate supply data today. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA.

Bookings for all U.S. goods meant to last at least three years rose 22.6%, the Commerce Department said today in Washington. A U.K. air show helped spark a 318% jump in plane orders, the most since January 2011. Orders for non-military capital goods excluding aircraft fell 0.5% last month after a June increase of 5.4% that was the strongest since November.

Ukrainian Conflict

Putin and Poroshenko began a meeting with the European Union’s foreign-policy chief, Catherine Ashton and the presidents of Belarus and Kazakhstan at a summit in Minsk of the Customs Union, a Russian-led trade bloc. No separate bilateral meeting is planned between them, Russian Foreign Minister Sergei Lavrov said yesterday.

The conflict between Ukraine’s government and pro-Russian separatists has left more than 2,000 dead since Putin annexed Crimea in March. Ukraine said today 200 rebels and 12 Ukrainian servicemen died in the past 24 hours.

Iraq’s semi-autonomous Kurdistan Regional Government can bring $100 million of crude ashore in Texas after a U.S. judge threw out a court order that would have required federal agents to seize and hold the cargo for the Iraqi Oil Ministry until a court there decided which government owns it.

Acceptance of Kurdish crude by international buyers and by the country’s central government would boost the nation’s total exports by about 12%, according to Julian Lee, a strategist at Bloomberg First Word whose views are his own.

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