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WTI Trades Near $100 After Cushing Stockpiles Drop; Brent Steady

March 20 (Bloomberg) -- West Texas Intermediate crude traded near the highest level in more than a week after U.S. government data showed stockpiles fell at the delivery point for benchmark oil contracts. Brent was steady in London.

Futures were little changed in New York after rising 0.7 percent yesterday. Supplies at Cushing, Oklahoma, the nation’s biggest oil-storage center, shrank by 989,000 barrels last week, the Energy Information Administration said. Goldman Sachs Group Inc. maintained its forecast for Brent to slide to $105 a barrel by year-end as weaker consumption growth in the U.S. and China offsets Libyan supply disruptions.

“The decline in Cushing stocks continues to provide support to WTI,” Abhishek Deshpande, a London-based analyst at Natixis SA, said by e-mail. While the WTI price should decline closer to the start of refinery maintenance at the end of March, “since the U.S. market is fundamentally robust, we may not see a big drop,” he said.

WTI for April delivery, which expires today, slipped 37 cents to $100 a barrel in electronic trading on the New York Mercantile Exchange at 10:47 a.m. London time. It settled at $100.37 yesterday, the highest close since March 10. The more- active May contract fell 45 cents to $98.72. The volume of all futures traded was about 10 percent below the 100-day average for the time of day. Prices have advanced 1.6 percent this year.

Brent for May settlement slipped 20 cents to $105.65 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $6.92 to WTI for the same month on ICE. The spread narrowed for a third day yesterday to close at $6.68, the smallest gap since March 7.

Cushing Supplies

WTI rebounded 5.2 percent in February as winter storms bolstered U.S. heating demand and crude inventories shrank by a fifth at Cushing. Supplies at the hub dropped to 29.8 million barrels in the week ended March 14, the lowest level for that time of year since 2008, the EIA reported yesterday.

Stockpiles have fallen since the southern portion of the Keystone XL pipeline began moving oil to the Texas Gulf Coast in January. Enterprise Products Partners LP on March 18 said it’s looping the existing Seaway line with a parallel pipe that will boost capacity to the Houston area to 850,000 barrels a day from late May or early June.

Gasoline inventories slid for a fourth week, decreasing by 1.47 million barrels to 222.3 million, said the EIA, the Energy Department’s statistical arm. Distillates, including diesel and heating oil, dropped 3.1 million barrels, more than triple the median of 11 estimates in a Bloomberg News survey of analysts.

Imports, Output

Crude stockpiles nationwide expanded by 5.85 million barrels last week, the EIA said, compared with a projected increase of 2.75 million. Production rose to 8.215 million barrels a day, the highest rate in almost 26 years, while four- week average imports fell to 7.192 million a day. That’s the least since January 1997.

Global oil consumption will climb this year by 1.38 million barrels a day, according to Damien Courvalin, an analyst at Goldman in New York. The importance of Russian crude and natural gas supply to both Europe and the government in Moscow indicates energy exports are “a less likely area” where additional sanctions may be imposed, he said in an e-mailed note today.

Ukraine said it plans to reinforce its eastern border with Russia and withdraw troops from Crimea, ceding control of the Black Sea peninsula as tensions remained high over moves to annex the region. The decision signals concern in Kiev that Russia may seek to create turmoil in areas with large pro-Russia populations. The governor of the eastern Kharkiv region warned this week that Russia had massed forces about 15 kilometers (9 miles) from the frontier.

To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net Rachel Graham, James Herron

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