Oil Rises for a Second Day on Signs of U.S. Economic Recovery
Dec. 23 (Bloomberg) -- Crude oil rose for a second day in New York as positive housing and fuel-inventory data signaled a recovery in the U.S., the world’s largest energy user.
Oil climbed above $74 a barrel yesterday after the National Association of Realtors reported November sales of existing homes increased at the highest annual rate since February 2007, indicating the industry at the center of the recession has stabilized. Separately, the American Petroleum Institute said the country’s crude oil and refined-product stockpiles declined.
“The psychology has changed significantly,” said Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney. “There are increasing signs of recovery in the key market, the U.S.”
Crude oil for February delivery rose as much as 38 cents, or 0.5 percent, to $74.78 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $74.75 at 4:06 p.m. Singapore time. Futures closed yesterday at $74.40, the highest settlement since Dec. 4. There will be no trading Dec. 25 for Christmas and on Jan. 1 for New Year’s Day.
Oil, which lost 54 percent in 2008, has gained 68 percent this year on speculation global demand for fuels will increase with the economic rebound.
Yesterday’s existing-homes sales figure rate exceeded the highest estimate from economists surveyed by Bloomberg News. The Commerce Department is expected to report today November sales of new homes also increased.
Stockpiles Fall
Commercially held crude oil inventories in the U.S. fell 3.71 million barrels last week to 328.8 million, said the industry-funded American Petroleum Institute. Gasoline stockpiles declined 1.1 million barrels to 215.9 million, the biggest drop in 10 weeks. Distillate fuel supplies, which include heating oil and diesel, slipped 745,000 barrels to 165.1 million, the API said.
An Energy Department report today is expected to show crude oil stockpiles fell 1.6 million barrels in the week ended Dec. 18, according to the median of estimates from 16 analysts polled by Bloomberg News. Distillate inventories probably dropped 2 million barrels, the survey showed. The report will be released at 10:30 a.m. in Washington.
U.S. gasoline demand rose the most in three weeks as drivers in the northeast filled up before a snowstorm, according to MasterCard Inc., the second-biggest credit card company.
Motorists bought an average 9.57 million barrels a day of gasoline in the week to Dec. 18, MasterCard said yesterday in its SpendingPulse report. Consumption increased 2.9 percent from the previous week and 1.7 percent from a year earlier.
OPEC Quotas
The Organization of Petroleum Exporting Countries agreed at a meeting yesterday in Luanda, Angola, to hold production quotas at 24.845 million barrels a day. The 12-member group, which pumps about 40 percent of the world’s oil, has gathered four times this year without revising official output targets.
Rising oil prices have encouraged some OPEC members to renege on their pledge in 2008 to reduce supply by 4.2 million barrels a day. Secretary-General Abdalla el-Badri said he wants quota compliance to improve to between 75 percent and 80 percent from the current level of about 60 percent.
“No change in quotas was largely expected by the market,” said Kaha Kiknavelidze, a managing partner at London-based Rioni Capital Partners LLP, a hedge fund that specializes in emerging markets. “More important is compliance, which has deteriorated meaningfully. That puts pressure on prices.”
Brent crude oil for February settlement rose as much as 46 cents, or 0.6 percent, to $73.92 a barrel on the London-based ICE Futures Europe exchange. The contract was at $73.90 at 4:07 p.m. Singapore time. Yesterday, it advanced 47 cents, or 0.6 percent, to settle at $73.46 a barrel. |