West Texas Intermediate oil climbed to a four-week high on speculation that crude inventories at Cushing, Oklahoma, the delivery point for the contract, slipped for the 15th time in 16 weeks. Brent traded near $110 a barrel.
Futures rose 0.6 percent in New York. Cushing supplies fell 592,000 barrels in the week ended May 9 to 23.4 million, the least since December 2008, according to the Energy Information Administration. The June WTI contract, which expires tomorrow, advanced more than those for delivery further out.
“WTI is the outlier today,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “Inventories are at the lowest level in more than five years at Cushing and may continue to decline. Tomorrow’s expiration of the June contract is probably leading to short covering as those who bet on lower prices run out of time.”
WTI for June delivery advanced 59 cents to settle at $102.61 a barrel on the New York Mercantile Exchange. It was the highest close since April 21. June futures expire tomorrow. The more-active July contract increased 53 cents, or 0.5 percent, to $102.11.
Brent for July settlement slipped 38 cents, or 0.3 percent, to end the session at $109.37 a barrel on the London-based ICE Europe Futures exchange. The North Sea crude closed at a $7.26 premium to the July WTI contract, down from $8.17 on May 16.
The WTI market is in backwardation, a structure where short-term supplies cost more than later deliveries. This reduces the incentive to bolster stockpiles in advance.
Cushing supplies have tumbled 44 percent since Jan. 24, according to the EIA, the Energy Department’s statistical arm. Stockpiles have slipped since the southern leg of the Keystone XL pipeline began moving oil to Gulf Coast refineries from storage hub in January.
Brent gained as much as 0.5 percent earlier on fears of a supply disruption as a Libyan military police chief said he disbanded parliament after a militia he backs stormed it yesterday. The North African country has struggled to restore security three years after a revolt that toppled former leader Muammar Qaddafi. Oil output fell to 215,000 barrels a day in April, about 14 percent of capacity, data compiled by Bloomberg show.
Oil in New York surged to a two-year high in September on speculation the U.S. would attack Syria as punishment for the alleged use of chemical weapons.
Hedge funds and other large speculators boosted bullish bets on WTI by 11,652 futures and options combined, or 3.9 percent, to 311,195 in the week ended May 13, according to data from the U.S. Commodity Futures Trading Commission.
“There’s an elevated level of length,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “I would be cautious because speculators are already so long WTI.”
Money managers increased net bullish bets on Brent over the same period by 7,525 contracts, or 4.5 percent, ICE data showed.