Oil advanced from a five-week low inNew York as investors speculated that yesterday’s drop, the biggest since September, was exaggerated.
West Texas Intermediate futures gained as much as 0.9 percent today after falling yesterday and nearing the 50-day moving average of about $94.24 a barrel, according to data compiled by Bloomberg. Buy orders tend to be clustered near chart-support levels. Oil fell after OPEC raised its output ceiling and Europe’s debt crisis worsened, threatening a recession that may curb demand for commodities.
“There is buying interest on the dips,” Ken Hasegawa, a commodity-derivatives sales manager at Newedge in Tokyo said in an interview. “This level, $95 for WTI, is one of the key points to buy. It’s not only short-covering, but there might be some fresh long positions.”
Crude for January delivery increased as much as 83 cents to $95.78 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.21 at 4:50 p.m. Sydney time. The contract yesterday slid 5.2 percent to $94.95, the lowest close since Nov. 4. Prices are 4.2 percent higher this year after climbing 15 percent in 2010.
Brent oil for January settlement rose 0.7 percent to $105.78 a barrel on the London-based ICE Futures Europe exchange. The contract expires today. The more-actively traded February future climbed 99 cents to $105.24. The European benchmark contract’s premium to West Texas Intermediate was at $10.63, compared with a record $27.88 on Oct. 14.
OPEC, Oil Stockpiles
Members of the Organization of Petroleum Exporting Countries yesterday agreed to raise their output target to 30 million barrels a day, changing its production quota for the first time in three years.
U.S. crude stockpiles declined 1.9 million barrels last week, according to a report from the Energy Department yesterday. It was the first drop in three weeks. They were forecast to decline 2.5 million barrels, according to the median of 12 analyst estimates in a Bloomberg News survey.
Gasoline supplies gained 3.8 million barrels to 218.8 million barrels, Energy Department data shows. They were estimated to rise 1.2 million barrels, according to the survey. Distillate inventories, a category that includes heating oil and diesel, climbed 480,000 barrels compared with a projection for a 1 million barrel increase.
The euro-area economy is likely to slip back into a recession and its leaders’ new plan to end the debt crisis hasn’t completely eliminated the risk of a breakup of the currency region, according to an Ernst & Young LLP report published in London today.