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WTI Little Changed as Weaker Economic Signs Follow Cushing Drop

Feb. 13 (Bloomberg) -- West Texas Intermediate oil was little changed as investors assessed an unexpected drop in U.S. retail sales and crude stockpiles tumbled at Cushing, Oklahoma, the delivery point for futures traded in New York.

Prices moved in a $1.11 range. Futures fell as much as 1 percent. Retail sales declined by the most in 10 months, Commerce Department figures showed today in Washington. January was the coldest start of the year in the U.S. since 2001, the National Oceanic and Atmospheric Administration said today. WTI rose to the highest level since October yesterday after Energy Information Administration data showed Cushing supplies slipped 6.6 percent to 37.6 million barrels last week.

“We’re back up above $100 and the bulls still have the momentum,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The disappointing retail sales numbers have been shrugged off because of last month’s weather.”

WTI for March delivery rose 8 cents to $100.45 a barrel at 11:56 a.m. on the New York Mercantile Exchange. Yesterday’s settlement of $100.37 was the highest Oct. 18. Trading was 4.3 percent lower than the 100-day average.

Brent for March settlement, which expires today, gained 5 cents to $108.84 a barrel on London-based ICE Futures Europe. The more active April contract increased 26 cents to $108.61. Trading was 1.7 percent below the 100-day average.

The European grade, used as a benchmark for more than half of the world’s crude, traded at $8.39 premium to WTI versus $8.42 yesterday.

Cushing Supplies

Brent’s premium to WTI fell to the narrowest point since October based on closing prices. The spread has declined as the southern portion of TransCanada Corp.’s Keystone XL pipeline began moving crude oil to the Gulf Coast of Texas from Cushing last month.

“WTI continues to get strength from the opening of the southern portion of the pipeline and the fall in supplies at Cushing,” McGillian said.

Retail sales were projected to be unchanged, according to the median 86 forecasts by economists in a Bloomberg survey.

U.S. jobless claims increased by 8,000 to 339,000 in the week ended Feb. 8 from 331,000 in the prior period, a Labor Department report showed. The median forecast of 52 economists surveyed by Bloomberg called for a decrease to 330,000.

Oil inventories in advanced economies tumbled in the fourth quarter by the most since 1999, the International Energy Agency said today. The Paris-based adviser to developed countries also boosted forecasts for global fuel demand this year and the amount of crude that will be required from the Organization of Petroleum Exporting Countries.

IEA Data

“The IEA data today should lend some support,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “Demand is buoyant, which should keep prices from falling too far.”

U.S. crude inventories climbed by 3.27 million barrels to 361.4 million last week, the EIA said yesterday. Supplies of distillate fuel, a category that includes heating oil and diesel, decreased by 731,000 barrels to 113.1 million.

Total fuel consumption fell 569,000 barrels a day to 18.5 million in the week ended Feb. 7, yesterday’s EIA report showed.

WTI’s 14-day relative strength index rose to 65.7 yesterday, according to data compiled by Bloomberg. That’s the most since Dec. 27, when crude settled at a 10-week high before falling. An RSI above 70 typically signals a market is overbought. Today’s reading is below 61.

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