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Oil Trades Near Four-Month High as Run Rates, Supply Seen Rising

08 Jan 2013

Oil traded near the highest level in almost four months in New York before a government report that may show refinery utilization rose and stockpiles increased in the U.S., the world’s biggest crude-consuming nation.

West Texas Intermediate futures were little changed after advancing a second day yesterday. Refineries probably boosted their average run rate last week by 0.2 percentage points to 90.6 percent, according to a Bloomberg survey before an Energy Department report tomorrow. Crude inventories probably climbed1.4 million barrels and fuel supplies also gained, the survey shows. The U.S. corporate earnings season starts today, while Chinese export and import data for December are due Jan. 10.

“Investors will want to see that we’re getting the numbers during earnings season to suggest that the recovery in the U.S. is sustained,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney.“We’ve got data due out this week from China and I think that will be a key as to whether or not we bust through $95.”

Crude for February delivery was at $93.11 a barrel, down 8 cents, in electronic trading on the New York Mercantile Exchangeat 4 p.m. Singapore time. The contract increased 10 cents to $93.19 yesterday, the highest settlement since Sept. 18.

Brent for February settlement fell 12 cents to $111.28 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $18.17 to WTI. The difference shrank to $18.21 yesterday, the narrowest since Sept. 24.

Refinery Maintenance

Oil’s advance in New York is stalling as a technical formation signals buying interest may be waning, according to data compiled by Bloomberg. Futures yesterday closed 2 cents a barrel below the opening price, creating a cross-shaped candlestick known as a “doji” for the second time in three days. Prices changed direction after a similar pattern on Dec. 24. Crude has longer-term chart resistance along its 50-week moving average, around $93.70 a barrel.

Gasoline futures rose as some U.S. refineries cut production of fuels during maintenance. Gasoline for February delivery increased 0.1 percent to $2.7813 a gallon on the Nymex, after gaining 0.5 percent yesterday.

Motiva Enterprises LLC shut a 325,000 barrel-a-day crude unit at its Port Arthur, Texas, refinery. BP Plc (BP/) began work on the fluid catalytic cracker at its 266,000 barrel-a-day Carson plant in California. Phillips 66 (PSX) reported emissions Jan. 5 at its 238,000 barrel-a-day Bayway plant in New Jersey.

Oil Stockpiles

U.S. gasoline inventories probably gained by 2.6 million barrels last week, according to the median of six analyst estimates in the Bloomberg survey before tomorrow’s Energy Department report. Distillate supplies, a category that includes heating oil and diesel, likely increased 1.65 million barrels, the survey shows.

Crude stockpiles probably rebounded after tumbling 11.1 million barrels in the week ended Dec. 28. Supplies have decreased during December and risen in January for the past six years because of inventory shifts for tax and accounting purposes. Companies in Gulf Coast states minimize supplies at the end of the year to reduce local taxes.

The American Petroleum Institute will release separate inventory data today. The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department in Washington for its weekly survey.

The premium of Brent oil to WTI has narrowed this week asEnterprise Products Partners LP (EPD) and Enbridge Inc. (ENB) prepare to resume service on the 500-mile (805-kilometer) Seaway link at full rates after more than doubling the line’s capacity to 400,000 barrels a day from 150,000.