May 30 (Bloomberg) -- West Texas Intermediate headed for its first monthly advance since February as crude inventories shrank at the delivery point for New York contracts. Brent was steady in London.
Futures were little changed after rising 0.8 percent yesterday. Stockpiles at Cushing, Oklahoma, the biggest U.S. oil-storage hub, dropped by 1.53 million barrels last week to the lowest level since November 2008, according to the Energy Information Administration. Supplies nationwide expanded by 1.66 million, compared with a 500,000 barrel gain forecast in a Bloomberg News survey of analysts.
“Inventories tell us we’re awash but the market wants to believe in demand,” said Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney. “Every time oil moves lower it holds and that tells us the market wants to buy. We could be in for a sustained price increase.”
WTI for July delivery was at $103.41 a barrel in electronic trading on the New York Mercantile Exchange, down 17 cents, at 10:53 a.m. Sydney time. The contract climbed 86 cents to $103.58 yesterday, the highest close since May 27. The volume of all futures traded was about 62 percent below the 100-day average. Prices are up 3.7 percent this month.
Brent for July settlement was 5 cents higher at $110.02 a barrel on the London-based ICE Futures Europe exchange. It’s poised for a second monthly advance. The European benchmark crude traded at a premium of $6.61 to WTI, compared with $8.33 at the end of April.
Stockpiles at Cushing fell to 21.7 million barrels, declining for the 16th time in 17 weeks, the EIA, the Energy Department’s statistical arm, reported yesterday. Supplies have decreased since the southern leg of the Keystone XL pipeline began moving crude to Gulf Coast refineries in January.