WTI Trades Near 3-Day High as Supplies Seen Falling

West Texas Intermediate traded near a three-day high amid speculation that crude stockpiles declined a second week in the U.S., the world’s biggest oil consumer. Brent was steady in London.

Futures were little changed in New York after rising 0.6 percent yesterday. Crude supplies near a record high probably fell by 1 million barrels last week to 396.6 million, according to a Bloomberg News survey before a government report tomorrow. Crude stockpiles at Cushing, Oklahoma, the delivery point for New York futures, probably fell for a 14th time in 15 weeks, according to a separate Bloomberg survey.

“There could be further stock draws in Cushing, which will continue to support the WTI” market, Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland, said by e-mail.

WTI for June delivery was at $100.45 a barrel, down 14 cents, in electronic trading on the New York Mercantile Exchange at 9:17 a.m. London time. The contract rose 60 cents to $100.59 yesterday, the highest close since May 7. The volume of all futures traded was about 28 percent below the 100-day average for the time of day. Prices are up 2.1 percent this year.

Brent for June settlement was 25 cents lower at $108.16 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $7.72 to WTI on ICE. It ended the session at $7.82 yesterday.
Crude Stockpiles

WTI rose 0.2 percent last week as crude supplies slid from the highest level since the Energy Information Administration began publishing weekly reports in 1982. Stockpiles fell 1.78 million barrels to 397.6 million, the first decline in five weeks, according to the Energy Department’s statistical arm.

Gasoline inventories probably rose by 300,000 barrels last week, according to the median estimate of seven analysts in the survey. Distillate stockpiles, a category that includes heating oil and diesel, increased by 1 million, the survey shows.

Crude supplies at Cushing, Oklahoma, the delivery point for New York futures, probably fell for a 14th time in 15 weeks, according to a separate Bloomberg survey. Stockpiles have shrunk since the southern portion of the Keystone XL pipeline began moving oil in January from the U.S. Midwest to the Gulf Coast.
China Data

“It’s encouraging to see inventories starting to come off, but the broad picture is that stockpiles remain high,” said Ric Spooner, a chief strategist at CMC Markets in Sydney who predicts investors may sell WTI contracts if prices climb to $101.20 a barrel. “The market seems to have a fairly high tolerance toward Ukrainian news at the moment, but obviously it’s something that oil traders need to bear in mind.”

In Ukraine, rebels in the east of the country said they’re seeking to join Russia after disputed referendums. The government in Kiev was given a deadline to pay for Russian natural gas to prevent a supply cutoff.

Russia’s state-controlled gas monopoly, OAO Gazprom, said Ukraine must pay for next month’s supplies by June 2 or they will be shut off the next day. Gazprom will send a bill today, Chief Executive Officer Alexey Miller said yesterday at a meeting with Russian Prime Minister Dmitry Medvedev.

China’s factory production rose 8.7 percent in April from a year earlier, the National Bureau of Statistics said today in Beijing, compared with the 8.9 percent median estimate of analysts surveyed by Bloomberg News. Industrial output growth slowed for the third month in March to 8.8 percent.

The country’s refiners in April processed the lowest volume of crude in three months on a per-day basis because of seasonal maintenance. China refined 39.58 million tons last month, or about 9.67 million barrels a day, according to data released today by the National Bureau of Statistics.

China will account for about 11 percent of global oil consumption this year, compared with 21 percent for the U.S., estimates from the International Energy Agency in Paris show.
Source: Bloomberg