Jan. 8 (Bloomberg) -- West Texas Intermediate rose for a second day on speculation government data will show crude stockpiles declined a sixth week in the U.S., the world’s biggest oil consumer.
Futures climbed as much as 0.5 percent in New York. Crude inventories fell by 2.75 million barrels last week, according to a Bloomberg News survey before an Energy Information Administration report today. The coldest U.S. weather in almost 20 years also signaled fuel demand may gain. In Iraq, al-Qaeda and allied fighters vowed to resist government forces trying to retake towns Prime Minister Nouri al-Maliki says are under the terrorist group’s sway.
“Markets are likely to trade mostly sideways,” said Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark. “Various issues remain in the geopolitical scene. We set geopolitics as moderately bullish.”
WTI for February delivery advanced as much as 51 cents to $94.18 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.76 as of 10:53 a.m. London time. The contract rose 0.3 percent to $93.67 yesterday, snapping a five- day losing streak. The volume of all futures traded was about 38 percent below the 100-day average.
Brent for February settlement climbed as much as 41 cents, or 0.4 percent, to $107.76 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a $13.74 premium to WTI. The spread closed at $13.44 yesterday, narrowing for the first time in six days.
Distillate inventories, including heating oil and diesel, increased by 2.25 million barrels in the week ended Jan. 3, according to the median estimate of 10 analysts surveyed by Bloomberg before the report from the EIA, the Energy Department’s statistical arm.
Gasoline stockpiles are projected to have expanded by 2.5 million barrels, the survey shows. Refinery utilization rates probably advanced 0.25 percentage points to an average 92.65 percent of capacity.
The American Petroleum Institute said yesterday that crude inventories shrank by 7.31 million barrels, while distillates gained by 5.17 million barrels and gasoline supplies increased by 5.58 million. The Washington-based group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA.
Fighting in Fallujah and the surrounding Anbar province over the past few days is part of an escalating wave of sectarian violence in Iraq, where Maliki’s Shiite Muslim-led government is confronting Sunni Muslim militants. Iraq is the second largest member in the Organization of Petroleum Exporting Countries, pumping 3.2 million barrels a day last month, according to a Bloomberg survey.
Investors may buy WTI at about $93.20, Ric Spooner, a chief analyst at CMC Markets in Sydney, said by phone today. On the daily chart, futures halted the past week’s drop near an upward- sloping trend line that connects the intraday lows of April and November, data compiled by Bloomberg show. Buy orders tend to be clustered around technical-support levels.
Cold weather has prompted gas-pipeline operators to reduce flows, fuel terminals to shut loading racks and refineries to cut production. Temperatures in several cities across the eastern half of the U.S. slid to record lows, with New York’s Central Park hitting 4 degrees Fahrenheit (minus 16 Celsius) yesterday, breaking a mark for the date set in 1896, according to AccuWeather Inc. in State College, Pennsylvania.
“Oil did get a bit of a boost on the weather,” Phil Flynn, a senior analyst at Price Futures Group in Chicago, said in an e-mail today.
Midwest fuel terminals are jammed from increased demand for heating oil and gasoline as drivers keep tanks filled for shopping trips and run engines longer to warm up, said Jeff Lykins, the chief executive officer and president of Lykins Cos., a Milford, Ohio-based marketer that operates in 15 states.