July 19 (Bloomberg) -- Oil climbed in New York as signs of shrinking crude stockpiles in the U.S. and rising demand in China countered speculation that Europe’s debt crisis will temper fuel consumption.
Futures advanced as much as 0.5 percent before a report tomorrow that may show U.S. inventories dropped a seventh week. Prices also rose after China said its apparent fuel consumption rose 7.2 percent in the first half. Crude slipped yesterday amid concern Europe’s leaders will be unable to agree on steps to ensure the region’s financial stability at a summit this week.
“It’s summer drive-time, inventories are coming back a bit and people are suggesting that the economy is not going to falter,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty in Sydney, who predicts oil in New York will average $100 a barrel this year. “The market’s not decided as to what the consequences are to oil yet” from the debt situation, he said.
Crude for August delivery gained as much as 45 cents to $96.38 a barrel in electronic trading on the New York Mercantile Exchange, and was at $96.31 at 2:48 p.m. Singapore time. The contract yesterday declined $1.31 to $95.93, the lowest since July 14. The more actively traded September future climbed 38 cents to $96.63.
Brent oil for September settlement rose as much as 55 cents, or 0.5 percent, to $116.60 a barrel on the ICE Futures Europe exchange. Prices are 54 percent higher the past year.
An Energy Department report may show U.S. crude supplies fell 1.5 million barrels for a seventh week in the seven days ended July 15, according to the median of 10 analyst estimates in a Bloomberg News survey. Gasoline inventories probably slid 100,000 barrels from 211.7 million, the survey shows.
European Union government chiefs plan to meet for the second time in a month on July 21, aiming to break a deadlock over a new Greek rescue that has spooked investors. Spanish and Italian bonds yields surged yesterday, piling pressure on officials to end the turmoil. Spain and Greece will sell as much as 5.75 billion euros ($8.1 billion) of bills today.
Oil’s climb in New York may stall along the 50-day moving average, at $97.50 a barrel today, according to data compiled by Bloomberg. Front-month futures last settled above this indicator on May 5. A breach of technical resistance usually means prices will continue to rise.
Futures have risen 5.9 percent in New York since the International Energy Agency announced a release of strategic stockpiles June 23. IEA member nations are likely to decide against offering more oil after last month’s release failed to curb prices and Middle East output rose, according to a Bloomberg News survey. The IEA will say on about July 23 whether they will continue emergency sales to make up for supply choked off by the Libyan conflict.
Oil is advancing as the first tropical storms of the Atlantic Hurricane season form. Bret, the second such system, is moving northeast away from the coast of Florida on a track that will take it out to sea, the U.S. National Hurricane Center said. In the eastern Pacific, Tropical Storm Dora formed yesterday about 400 miles (644 kilometers) south-southeast of Salina Cruz, Mexico, the center said.
--With assistance from Yee Kai Pin in Singapore. Editors: Alexander Kwiatkowski, Jane, Ching Shen Lee
To contact the reporter on this story: Ben Sharples in Melbourne at firstname.lastname@example.org
To contact the editor responsible for this story: Alexander Kwiatkowski at email@example.com