Aug. 29 (Bloomberg) -- West Texas Intermediate crude headed for the first weekly gain in more than a month on speculation an improving U.S. economy will boost fuel demand.
Prices rose for a fourth day after touching a seven-month low on Aug. 25. U.S. economy expanded more than previously forecast in the second quarter, the Commerce Department said yesterday. Demand for gasoline rose 3.7 percent last week, latest Energy Information Administration data showed. Brent gained on escalating tensions between Ukraine and Russia.
“Economic numbers continue to point to a slowly improving economic picture, and it means better fuel demand,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The market kind of overextended itself when it slid to the seven-month low. We do have new concern surrounding the fighting going on in Ukraine.”
WTI for October delivery advanced 64 cents, or 0.7 percent, to $95.19 a barrel at 9:02 a.m. on the New York Mercantile Exchange. Prices are up 1.6 percent this week. The volume of all futures traded was about 7.3 percent above the 100-day average. Prices have declined 3 percent in August, a second consecutive monthly loss.
Brent for October settlement rose 39 cents, or 0.4 percent, to $102.85 a barrel on the London-based ICE Futures Europe exchange. Volume was 9.6 percent above the 100-day average. The European benchmark crude traded at a $7.67 premium to WTI, compared with $7.91 yesterday.
Gross domestic product, propelled by the biggest gain in business investment in more than two years, grew 4.2 percent last quarter, accelerating from an initial projection of 4 percent, the Commerce Department reported yesterday.
The U.S. will account for about 21 percent of global oil demand this year, almost double that of China, the second- largest consumer, forecasts from the International Energy Agency in Paris show.
Finished gasoline supplied, a proxy for demand, rose to 9.1 million barrels a day last week, the EIA, the Energy Department’s statistical arm, said. Gasoline use averaged 9.04 million barrels a day in the four weeks ended Aug. 22.
WTI may increase next week amid worsening tension between Ukraine and Russia, a Bloomberg survey of analysts and traders shows.
Separatists in eastern Ukraine are battling government forces on two fronts near the Sea of Azov and south of Donetsk after NATO reported a surge of Russian troops and advanced equipment into the war-zone.
The U.S. and the European Union threatened Russian President Vladimir Putin with further sanctions, even as the EU began talks in Moscow today aimed at a temporary deal with Ukraine to allow natural-gas flows to resume.