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Oil Trades Near Two-Day Low as U.S. Stockpiles Unexpectedly Gain

13 Sep 2012

Oil traded near the lowest price in two days in New York after stockpiles unexpectedly rose in the U.S., the world’s biggest crude user.

Futures were little changed after dropping for the first time in six days yesterday. Inventories rose 1.99 million barrels last week, the Energy Department said yesterday. They were forecast to fall by 2.9 million barrels, according to the median estimate of 11 analysts in a Bloomberg News survey. TheFederal Open Market Committee may announce additional stimulus measures for the economy at the end of a two-day meeting today.

“The oil market couldn’t go higher because of the bearish impact of the inventory data,” said Ken Hasegawa, a derivative sales manager at Newedge Group in Tokyo who expects West Texas Intermediate crude to trade below $98.29 a barrel, the Aug. 23 intraday high that marked the peak of a rally since June. “The lower side will be limited ahead of the FOMC meeting. It’s a big event.”

Crude for October delivery was at $96.92 a barrel, down 9 cents, in electronic trading on the New York Mercantile Exchangeat 3 p.m. Singapore time. WTI slipped 16 cents to $97.01 a barrel yesterday, the lowest close since Sept. 10. Front-month prices are down 1.9 percent this year.

Brent oil for October settlement fell 1 cent to $115.95 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to WTI was at $19.03, from $18.95 yesterday.

Gasoline Stockpiles

Oil in New York has technical resistance along the upper Bollinger Band on the daily chart, at around $99.20 a barrel today, according to data compiled by Bloomberg. Futures have halted advances near this indicator since July. Sell orders tend to be clustered near chart-resistance levels.

U.S. gasoline inventories fell 1.18 million barrels last week, the Energy Department report showed. They were forecast to decline by 1.7 million, according to the survey. Distillate supplies, a category that includes heating oil and diesel, rose 1.48 million barrels, compared with a projected decline of 500,000.

The FOMC will probably announce a third round of bond purchases after its meeting and extend the duration of its zero-interest-rate policy into 2015, according to two-thirds of the economists surveyed by Bloomberg.

Global oil inventories have become “more comfortable,”the International Energy Agency said in a report yesterday. Daily output by the Organization of Petroleum Exporting Countries increased by 45,000 barrels last month to 31.55 million, or about 450,000 more than required this quarter and 950,000 more than next quarter, the Paris-based IEA said.

Emergency Reserves

The agency didn’t specify whether members should release emergency reserves to tame prices, a move discussed last month by leaders in the U.S., U.K. and France.

“We’ve got effectively an implied stockpile-build in the fourth quarter, so we don’t see a need for an emergency stock release,” said Alan Gelder, the head of downstream research atWood Mackenzie Ltd. in London. “That supply’s mainly coming out of non-OPEC. There’s some supply growth in the former Soviet Union in the third and fourth quarters, and Europe coming off North Sea maintenance.”

Iran’s oil exports rebounded to 1.1 million barrels a day in August from a record-low 930,000 in July, the IEA said. Shipments to Turkey and Malaysia increased the most. Sales by Iran, which is facing sanctions on its energy and financial industries because of its nuclear program, may rise again this month as nations including China, South Korea and India boost loadings, according to the report.