April 28 (Bloomberg) -- West Texas Intermediate crude rose, narrowing its discount to Brent on speculation supplies at Cushing, Oklahoma, fell last week and as the dollar weakened.
Prices rebounded from a two-week low. Stockpiles at the WTI contract’s delivery point may have decreased from the lowest level since 2009, according to two analysts surveyed by Bloomberg. The Bloomberg Dollar Spot Index declined for a third day before the U.S. Federal Reserve meets this week.
“We should see another drawdown at Cushing and that’s what’s supporting WTI,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “We are seeing the unwinding of the WTI-Brent spread. The dollar is weaker ahead of the Fed meeting and is helping oil.”
WTI for June delivery rose 41 cents, or 0.4 percent, to $101.01 a barrel at 9:05 a.m. on the New York Mercantile Exchange. It ended last week’s trading at the lowest settlement since April 7. The volume of all futures traded was about 11 percent below the 100-day average for the time of day.
Brent for June settlement slid 17 cents to $109.41 a barrel on the London-based ICE Futures Europe exchange. WTI was at a discount of $8.40 to Brent. The spread ended the April 25 session at $8.98, the widest based on closing prices in more than a month.
Cushing inventories have decreased since January as the southern leg of the Keystone XL pipeline began moving oil from the hub to Gulf Coast refineries. Supplies dropped to 26 million in the week ended April 18, the least since October 2009, according to the Energy Information Administration.
The EIA, the Energy Department’s statistical arm, may report on April 30 another drop at Cushing, according to the estimates of Flynn and Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois-based consulting company.
The Bloomberg dollar index slid 0.2 percent to 1,009.41. A weaker dollar increase oil’s investment appeal. The Fed meets on April 29-30, when economists predict the central bank will cut its monthly asset-purchase stimulus program by another $10 billion to $45 billion.
The U.S. will impose new sanctions today on people and companies close to Russian leader Vladimir Putin following his government’s lack of progress in easing the crisis in Ukraine, President Barack Obama said. European Union representatives discussed similar penalties, a European Commission spokeswoman said.
“The price is being supported by uncertainty as to the breadth and impact of sanctions taken against Russia,” Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London, said by e-mail. “Another important consideration is how Russia might retaliate against sanctions.”