Oil traded near the highest level in almost four months in New York before reports that may show the economy recovering in the U.S., the world’s biggest crude- consuming nation.
West Texas Intermediate futures were little changed after climbing 0.6 percent yesterday. Retail sales probably rose for a second month in December, according to a Bloomberg News survey of economists before Commerce Department data today. Other reports this week are projected to show increases in industrial production and homebuilding. Heating oil advanced a second day after the biggest gain since November on forecasts for colder weather on the U.S. East Coast and Midwest.
“There are signs of a recovery in the U.S.,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “If we test $95 a barrel on the topside, then I think we’ll see oil break through.”
Crude for February delivery was at $93.90 a barrel, down 24 cents, in electronic trading on the New York Mercantile Exchange at 12:34 p.m. Singapore time. The contract increased to $94.14 yesterday, the highest settlement since Sept. 18. Prices dropped 7.1 percent last year.
Brent for February settlement was at $111.63 a barrel, down 25 cents, on the London-based ICE Futures Europe exchange. The more active March contract slid 21 cents to $110.74. The front- month European benchmark contract was at a premium of $17.75 to WTI futures. It settled at $17.08 on Jan. 11, the narrowest since Sept. 19.
Oil’s advance in New York may stall as a technical indicator shows futures have risen too quickly for further gains to be sustainable. The 14-day relative strength index yesterday climbed above 70 for the second time in three days, according to data compiled by Bloomberg. That level signals a market is overbought and may decline. Today’s reading is 69.4.
Heating oil for February delivery rose as much as 0.72 cents to $3.0697 a gallon and was at $3.0626 on the New York Mercantile Exchange. The contract advanced 5.4 cents, or 1.8 percent, to $3.0625 yesterday, the biggest gain since Nov. 19.
Heating-fuel demand may rise as temperatures cool on the U.S. East Coast and Midwest next week. Computer models show that temperatures will be 5 degrees Fahrenheit (2.8 Celsius) below normal from Jan. 19 to Jan. 23, Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland, said in a note to clients. About 26 percent of households in the Northeast use oil for heating, Energy Department data show.
The nation’s distillate stockpiles, a category that includes heating oil and diesel, probably increased 1.5 million barrels last week, according to the median estimate of 8 analysts in a Bloomberg News survey before an Energy Department report tomorrow. Gasoline supplies probably rose 2.6 million barrels for an eighth weekly gain, while crude inventories climbed by 2.4 million, the survey shows.
The American Petroleum Institute is scheduled to release separate data today. 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.