Jan. 17 (Bloomberg) -- West Texas Intermediate crude rose to a two-week high on signs that economic growth in the U.S., the world’s biggest oil-consuming nation, is accelerating.
Futures gained as much as 1 percent. The pace of U.S. home construction dropped less than forecast in December, capping the best year for the industry since 2007, according to the Commerce Department. Industrial production rose for a fifth month in December, figures from the Federal Reserve showed today in Washington. U.S. crude supplies dropped to a 22-month low last week.
“The economic data continues to impress and points to higher fuel demand,” said John Kilduff, partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “This week’s inventory report, which showed that supplies dropped to a 22-month low, is adding to a sense of tightness in the market.”
WTI for February delivery rose 31 cents, or 0.3 percent, to $94.27 a barrel at 9:57 a.m. on the New York Mercantile Exchange. Futures reached $94.94, the highest intraday price since Jan. 3. They are up 1.7 percent this week. The volume of all futures traded was 16 percent below the 100-day average.
Brent for March settlement rose 55 cents, or 0.5 percent, to $106.30 a barrel on the London-based ICE Futures Europe exchange. Earlier it fell to $105.44, the lowest price for the front-month contract since Nov. 11. Volume was near the 100-day average. The February contract expired yesterday after losing 4 cents to $107.09.
The European benchmark grade traded at an $11.90 premium of to WTI for March delivery, down from front-month gap between the two February contracts of $13.13 at yesterday’s settlement.
Futures retreated from the day’s highs as the Standard & Poor’s 500 Index fell from a record.
Housing starts fell to a 999,000 annualized rate in December from a 1.11 million pace that was the highest since November 2007, according to the Commerce Department.
Production at factories, mines and utilities climbed 0.3 percent after a revised 1 percent increase in November, Fed data showed. The gain matched the median forecast of economists in a Bloomberg survey. Manufacturing output rose more than projected.
“WTI is being supported by improving U.S. economic conditions and large drawdowns in commercial oil inventories,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.
WTI increased 1.7 percent on Jan. 15, after an Energy Information Administration report showed crude stockpiles fell 7.66 million barrels to 350.2 million last week.
The Organization of Petroleum Exporting Countries said yesterday it pumped the least amount of oil in December since May 2011. OPEC’s 12 members produced 29.44 million barrels a day last month, down 20,000 barrels a day from November, according to a report from the Vienna-based group. That’s less than the average 29.6 million a day the group predicts will be required in 2014.