Oil in New York rebounded after better-than-forecast U.S. economic figures fueled speculation that energy demand in the world’s largest crude user will increase.
Futures rose as much as 0.3 percent after earlier dropping as much as 1.2 percent.
The U.S. economy expanded by 2 percent in the third quarter, 0.2 percent more than forecast, paced by a pickup in consumer spending, a rebound in government outlays and gains in residential construction, a government report today showed. Crude is still set for its largest weekly drop in a month amid increasing stockpiles.
“These are better figures than expected, and are conveniently good for Obama, and should see oil and stock prices pare losses,” Michael Hewson, London-based market analyst at CMC Markets, said by e-mail today.
“The main worry is that these figures will probably get revised down.” Crude for December delivery gained as much as 29 cents to $86.34 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.19 at 1:42 p.m. London time.
The contract yesterday snapped the longest losing streak in five months, gaining 32 cents to settle at $86.05 a barrel.
Prices are down 4.2 percent this week, the most since the five days ending Sept. 21. Brent for December settlement on the London-based ICE Futures Europe exchange was at $108.91 a barrel, up 42 cents.
The contract rose for the first time in eight days yesterday, ending the biggest stretch of declines since July 2010. Brent was at a premium of $22.72 to New York-traded West Texas Intermediate grade, up from $22.44 yesterday.
U.S. Economy
Gross domestic product, the value of all goods and services produced in the U.S., rose at a 2 percent annual rate after climbing 1.3 percent in the prior quarter, Commerce Department figures showed in Washington.
The median forecast of 86 economists surveyed by Bloomberg called for a 1.8 percent gain. Oil may decline next week on surging U.S. inventories, weakening demand and higher production, according to a Bloomberg News survey.
Sixteen of 36 analysts, or 44 percent, forecast crude will decrease through Nov. 2. Fifteen respondents, or 42 percent, predicted a gain. Five forecast little change. Last week, 58 percent of analysts projected a drop.
U.S. crude stockpiles increased to 375.1 million barrels in the week ended Oct. 19, the Department of Energy said on Oct. 24. Supplies at Cushing, Oklahoma, the delivery point for the WTI contract, rose by 40,000 barrels to 44.1 million, 40 percent higher than a year ago.
‘Frankenstorm’ Watch
Production in the U.S. climbed for a seventh week to 6.61 million barrels a day, a 17-year high. Gasoline consumption declined 2.7 percent to 8.49 million barrels a day, the slowest rate since March 16. The four-week average fell to 8.61 million, a six-month low.
Refinery utilization averaged 87.2 percent of capacity, from 87.4 percent. Hurricane Sandy will probably grow into a “Frankenstorm” that may become the worst to hit the U.S.
Northeast in 100 years if current forecasts are correct, according to the National Hurricane Center. As of 8 a.m.
New York time, Sandy had weakened to a Category 1 hurricane on the five-step Saffir-Simpson scale with top winds of 80 miles per hour, down from 100 mph earlier, according to the hurricane center in Miami.
It was located 15 miles (25 kilometers) east of Great Abaco Island in the northern Bahamas and moving northwest at 10 mph.
A tropical storm watch is in effect for large sections of the western Florida coastline as far as North Carolina. The center is advising businesses along the East Coast, where a number of oil refineries are situated, to monitor the progress of Sandy.
“The storm will likely lead to lower demand but any impact on refining assets would be more long lasting than lower demand over two days,” Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix GmbH, said today in a repot.
bloomberg.com
The U.S. economy expanded by 2 percent in the third quarter, 0.2 percent more than forecast, paced by a pickup in consumer spending, a rebound in government outlays and gains in residential construction, a government report today showed. Crude is still set for its largest weekly drop in a month amid increasing stockpiles.
“These are better figures than expected, and are conveniently good for Obama, and should see oil and stock prices pare losses,” Michael Hewson, London-based market analyst at CMC Markets, said by e-mail today.
“The main worry is that these figures will probably get revised down.” Crude for December delivery gained as much as 29 cents to $86.34 a barrel in electronic trading on the New York Mercantile Exchange and was at $86.19 at 1:42 p.m. London time.
The contract yesterday snapped the longest losing streak in five months, gaining 32 cents to settle at $86.05 a barrel.
Prices are down 4.2 percent this week, the most since the five days ending Sept. 21. Brent for December settlement on the London-based ICE Futures Europe exchange was at $108.91 a barrel, up 42 cents.
The contract rose for the first time in eight days yesterday, ending the biggest stretch of declines since July 2010. Brent was at a premium of $22.72 to New York-traded West Texas Intermediate grade, up from $22.44 yesterday.
U.S. Economy
Gross domestic product, the value of all goods and services produced in the U.S., rose at a 2 percent annual rate after climbing 1.3 percent in the prior quarter, Commerce Department figures showed in Washington.
The median forecast of 86 economists surveyed by Bloomberg called for a 1.8 percent gain. Oil may decline next week on surging U.S. inventories, weakening demand and higher production, according to a Bloomberg News survey.
Sixteen of 36 analysts, or 44 percent, forecast crude will decrease through Nov. 2. Fifteen respondents, or 42 percent, predicted a gain. Five forecast little change. Last week, 58 percent of analysts projected a drop.
U.S. crude stockpiles increased to 375.1 million barrels in the week ended Oct. 19, the Department of Energy said on Oct. 24. Supplies at Cushing, Oklahoma, the delivery point for the WTI contract, rose by 40,000 barrels to 44.1 million, 40 percent higher than a year ago.
‘Frankenstorm’ Watch
Production in the U.S. climbed for a seventh week to 6.61 million barrels a day, a 17-year high. Gasoline consumption declined 2.7 percent to 8.49 million barrels a day, the slowest rate since March 16. The four-week average fell to 8.61 million, a six-month low.
Refinery utilization averaged 87.2 percent of capacity, from 87.4 percent. Hurricane Sandy will probably grow into a “Frankenstorm” that may become the worst to hit the U.S.
Northeast in 100 years if current forecasts are correct, according to the National Hurricane Center. As of 8 a.m.
New York time, Sandy had weakened to a Category 1 hurricane on the five-step Saffir-Simpson scale with top winds of 80 miles per hour, down from 100 mph earlier, according to the hurricane center in Miami.
It was located 15 miles (25 kilometers) east of Great Abaco Island in the northern Bahamas and moving northwest at 10 mph.
A tropical storm watch is in effect for large sections of the western Florida coastline as far as North Carolina. The center is advising businesses along the East Coast, where a number of oil refineries are situated, to monitor the progress of Sandy.
“The storm will likely lead to lower demand but any impact on refining assets would be more long lasting than lower demand over two days,” Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix GmbH, said today in a repot.
bloomberg.com
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