Oil traded near a two-day low in New York on speculation fuel demand may falter as Europe struggles to tame its debt crisis and crude stockpiles increase in the U.S., the biggest consumer of the commodity.
Futures were little changed after slipping 1 percent yesterday. German Chancellor Angela Merkel said time is running out for Greece after the nation’s political leaders delayed until today a meeting to agree on the terms for a 130 billion- euro ($171 billion) bailout. An Energy Department report tomorrow may show crude inventories in the U.S. rose for a third week while gasoline use fell to a 10-year low, according to a Bloomberg News survey of analysts.
“The pattern of increased crude inventories and lower gasoline demand has impacted the demand outlook in the U.S.,” said Ric Spooner, a chief analyst at CMC Markets in Sydney. “Markets are also watching for a resolution in Europe.”
Oil for March delivery was at $97.19 a barrel, up 28 cents, in electronic trading on the New York Mercantile Exchange at 12:05 p.m. Sydney time. The contract yesterday fell 93 cents to $96.91, the lowest settlement since Feb. 2. Prices are down 1.7 percent this year.
Brent oil for March settlement advanced 43 cents to $116.36 a barrel on the ICE Futures Europe exchange as record-low temperatures in the region boosted fuel demand. The benchmark contract’s premium to New York-traded West Texas Intermediate widened for a ninth day to $19.17, the biggest gap based on closing prices since Oct. 24. The spread was a record $27.88 on Oct. 14.
Fuel Stockpiles
“Weather conditions appear to be the key reason for the disparity between the two crude oil grades, with Europe dealing with unseasonably cold weather and the U.S. experiencing mild weather conditions,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note today.
Temperatures have plunged across Europe, reaching as low as minus 50 Celsius (minus 58 Fahrenheit) in parts of Kazakhstan and minus 30.2 Celsius in the Russian city of Smolensk. Snow has blanketed London and fallen in Italy as far south as Naples. U.K. natural gas surged 27 percent yesterday as National Grid Plc forecast demand for the heating fuel will rise 16 percent above the seasonal norm.
U.S. crude inventories probably rose by 2.5 million barrels last week, according to the median of 7 analyst estimates in the Bloomberg survey before the Energy Department report. Gasoline stockpiles climbed 500,000 barrels for a second weekly gain and inventories of distillates, a category that includes diesel and heating oil, dropped 1 million barrels, the survey shows.
Petroleos Mexicanos, the state-owned oil company, closed a second crude-export terminal in the Gulf of Mexico after bad weather conditions got worse. The facility at the port of Coatzacoalcos was shut, Mexico’s Merchant Marine said yesterday in a weather bulletin on its website.
Futures were little changed after slipping 1 percent yesterday. German Chancellor Angela Merkel said time is running out for Greece after the nation’s political leaders delayed until today a meeting to agree on the terms for a 130 billion- euro ($171 billion) bailout. An Energy Department report tomorrow may show crude inventories in the U.S. rose for a third week while gasoline use fell to a 10-year low, according to a Bloomberg News survey of analysts.
“The pattern of increased crude inventories and lower gasoline demand has impacted the demand outlook in the U.S.,” said Ric Spooner, a chief analyst at CMC Markets in Sydney. “Markets are also watching for a resolution in Europe.”
Oil for March delivery was at $97.19 a barrel, up 28 cents, in electronic trading on the New York Mercantile Exchange at 12:05 p.m. Sydney time. The contract yesterday fell 93 cents to $96.91, the lowest settlement since Feb. 2. Prices are down 1.7 percent this year.
Brent oil for March settlement advanced 43 cents to $116.36 a barrel on the ICE Futures Europe exchange as record-low temperatures in the region boosted fuel demand. The benchmark contract’s premium to New York-traded West Texas Intermediate widened for a ninth day to $19.17, the biggest gap based on closing prices since Oct. 24. The spread was a record $27.88 on Oct. 14.
Fuel Stockpiles
“Weather conditions appear to be the key reason for the disparity between the two crude oil grades, with Europe dealing with unseasonably cold weather and the U.S. experiencing mild weather conditions,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in a note today.
Temperatures have plunged across Europe, reaching as low as minus 50 Celsius (minus 58 Fahrenheit) in parts of Kazakhstan and minus 30.2 Celsius in the Russian city of Smolensk. Snow has blanketed London and fallen in Italy as far south as Naples. U.K. natural gas surged 27 percent yesterday as National Grid Plc forecast demand for the heating fuel will rise 16 percent above the seasonal norm.
U.S. crude inventories probably rose by 2.5 million barrels last week, according to the median of 7 analyst estimates in the Bloomberg survey before the Energy Department report. Gasoline stockpiles climbed 500,000 barrels for a second weekly gain and inventories of distillates, a category that includes diesel and heating oil, dropped 1 million barrels, the survey shows.
Petroleos Mexicanos, the state-owned oil company, closed a second crude-export terminal in the Gulf of Mexico after bad weather conditions got worse. The facility at the port of Coatzacoalcos was shut, Mexico’s Merchant Marine said yesterday in a weather bulletin on its website.
