Oil fluctuates on signs U.S. crude, fuel stockpiles increasing

by on January 9, 2013 6:28 am GMT

Oil fluctuated in New York after an industry report showed rising stockpiles in the U.S., the world’s biggest crude-consuming nation.

West Texas Intermediate futures swung between gains and losses after slipping 4 cents yesterday. U.S. crude inventories increased 2.4 million barrels last week, the American Petroleum Institute said. An Energy Department report today may show supplies rose 2 million barrels, according to a Bloomberg News survey of analysts. Gasoline and distillate stockpiles also climbed, the API said. WTI is little changed since closing at the highest level in almost four months on Jan. 7.

“We’ve got inventory numbers tonight and with a forecast increase that keeps stockpiles at very elevated levels,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. “Overall, the markets remain firm. We do see wobbles during the course of the day but it is quite clear that we have a short- to medium-term uptrend in place and that’s consistent with the global industrial growth expectations.”

Crude for February delivery was at $92.98 a barrel in electronic trading on the New York Mercantile Exchange, down 17 cents, at 1:14 p.m. Singapore time. The contract settled at $93.19 on Jan. 7, the highest since Sept. 18. Prices dropped 7.1 percent last year after three years of gains.

Brent oil for February settlement on the London-based ICE Futures Europe exchange slid 24 cents to $111.70 a barrel. The European benchmark crude was at a premium of $18.72 to WTI contracts. The spread widened for the first time in four days yesterday to $18.79.

Fuel Supplies

Oil may fall in New York after failing to settle above technical resistance along its 50-week moving average yesterday, data compiled by Bloomberg show. Sell orders tend to be clustered near resistance levels. On the daily chart, the 14-day relative strength index remains close to 70, a level that would indicate further price gains aren’t sustainable.

U.S. gasoline stockpiles rose 7.9 million barrels in the week ended Jan. 3, the API report showed. Supplies are projected to climb 2.5 million barrels in the Energy Department report, according to the median estimate of 11 analysts surveyed by Bloomberg. Distillate inventories, including heating oil and diesel, increased 5.9 million barrels, compared with a forecast 1.9 million-barrel gain in the survey.

The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.

Price Forecast

The Energy Department raised its oil price projections for 2013 and forecast that global consumption will expand to a record. WTI will average $89.54 a barrel this year, up 1.3 percent from the December estimate of $88.38, it said yesterday in its monthly Short-Term Energy Outlook. The U.S. benchmark grade averaged $94.12 in 2012, less than the December estimate of $94.26.

U.S. gasoline demand fell last week to the lowest since consumption was tracked in July 2004, said MasterCard Inc. (MA) Drivers bought 7.82 million barrels a day of the fuel in the week to Jan. 4, down 3.5 percent from 8.1 million in the prior period, its SpendingPulse report showed yesterday.

Gasoline at the pump in the U.S. will peak at a lower price this year as oil production increases and demand declines, according to AAA, the largest U.S. motoring organization. The fuel may reach $3.60 to $3.80 a gallon in 2013, after rising as high as $3.936 last year on April 4, Chief Executive Officer Robert Darbelnet said yesterday. The 2012 average price was a record $3.60 a gallon, data from the group show.

Gasoline rose to $3.299 a gallon last week, down 2.5 percent from a year earlier, according to the Energy Department.