Oil Trades Near One-Week High on Outlook for Stimulus, Economy
Oil traded near the highest closing price in almost a week amid signs the U.S. recovery is improving and steps by China to stimulate its economy, indicating fuel demand may rise in the world’s biggest crude users.
Futures were little changed after earlier dropping as much as 1 percent. China approved plans for infrastructure projects including roads, ports and waterways, according to statements on the website of the National Development and Reform Commission yesterday. U.S. jobless claims declined last week and companies added more workers than forecast in August, reports showed before government data due today. Oil is still headed for its first weekly decline in six weeks.
Crude for October delivery was at $95.66 a barrel, up 13 cents, in electronic trading on the New York Mercantile Exchange at 3:31 p.m. Singapore time. The contract climbed 17 cents yesterday to $95.53, the highest close since Aug. 31. Futures are down 0.8 percent this week and 3.2 percent in 2012.
Brent oil for October settlement on the London-based ICE Futures Europe exchange was at $113.77 a barrel, up 28 cents. The European benchmark crude was at an $18.11 premium to New York-traded West Texas Intermediate grade, from $17.96 yesterday.
WTI has technical resistance along its 200-day moving average, at $96.61 a barrel, according to data compiled by Bloomberg. Futures have halted their advance near that level the past week. Sell orders tend to be clustered close to chart- resistance levels. Oil also settled below an upward-sloping trend channel for a second day yesterday, confirming a breach of technical support. The channel started from $77.28 a barrel, the 2012 intraday low on June 28, and marks where futures rebounded in early August.
The NDRC, China’s top planning body, approved 2,018 kilometers (1,254 miles) of highways in its second major construction announcement this week. The agency also cleared plans for sewage-treatment plants, waterway upgrades and port and warehouse projects, without giving an investment amount.
U.S. initial unemployment claims decreased by 12,000 to 365,000 in the week ended Sept. 1, the Labor Department reported yesterday. Private employers expanded payrolls by 201,000 in August, according to figures from ADP Employer Services, exceeding the 140,000 median gain forecast by economists in a Bloomberg survey. Employment probably rose by 130,000 in August after gaining 163,000 in July, according to a separate Bloomberg survey before a Labor Department report today.
Oil advanced yesterday after an Energy Department report showed U.S. crude stockpiles fell 7.4 million barrels last week to the lowest level in five months and the European Central Bank announced a bond-buying plan to ease the region’s debt crisis.
Gasoline inventories dropped 2.3 million barrels, less than a 3 million median estimate of 12 analysts surveyed by Bloomberg News. Distillate-fuel supplies, a category that includes heating oil and diesel, gained 993,000 barrels, compared with projected decline of 1.55 million.
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