Nov. 24 (Bloomberg) -- Oil rose from the lowest price in two weeks after a surprise drop in U.S. stockpiles, and as an unexpected advance in German business confidence countered concern that Europe’s debt crisis will trigger a recession.
New York futures gained as much as 1.1 percent. Crude inventories declined last week to the lowest since January 2010, according to an Energy Department report yesterday. German business confidence unexpectedly rose for the first time in five months in November. The official Saudi Press Agency reported that four people were killed and nine wounded in violence in the kingdom’s eastern province.
“Oil is holding the banner high, with strong demand for heating oil as we move into the winter combined with the lack of sweet crude from Libya,” said Thorbjorn Bak Jensen, an analyst at Global Risk Management in Middelfart, Denmark, who forecasts Brent will average $107 a barrel this quarter.
Crude for January delivery rose as much as $1.01 to $97.18 a barrel in electronic trading on the New York Mercantile Exchange. It was at $96.82 at 4:02 p.m. London time. Prices have gained 5.6 percent this year.
Floor trading on Nymex is closed today for the U.S. Thanksgiving holiday. Electronic transactions will be booked with tomorrow’s trades for settlement purposes.
Brent oil for January settlement on the London-based ICE Futures Europe exchange was at $107.61 a barrel, up 59 cents. The European benchmark crude was at a premium of $10.79 to New York-traded West Texas contracts. The spread reached a record $27.88 on Oct. 14.
German Business Climate
Oil closed at the lowest price since Nov. 9 yesterday after Germany failed to find buyers for 35 percent of bonds at an auction. Today’s business climate index from the Munich-based Ifo institute, based on a survey of 7,000 executives, rose to 106.6 from 106.4 in October. Economists in a Bloomberg News survey expected a decline to 105.2.
U.S. crude stockpiles fell 6.22 million barrels in the week ended Nov. 18 to 330.8 million barrels, according to yesterday’s Energy Department report, the biggest drop in nine weeks. Supplies were expected to climb 500,000 barrels, based on the median estimate of 13 analysts surveyed by Bloomberg News.
“The decrease in inventory is going to be a supportive factor to keep crude oil from losing too much ground,” said Ken Hasegawa, a commodity-derivatives trading manager at Newedge Group in Tokyo. “One hundred dollars is not far from now but I really doubt it will exceed the recent high of around $103.”
Distillate-fuel stockpiles declined 770,000 barrels to 133 million, the lowest since December 2008, the report showed. Stockpiles were down for an eighth week. Gasoline inventories surged 4.48 million barrels, the most since January.
Goldman Sachs Group Inc. yesterday raised its forecast for West Texas crude to $102 a barrel for the first quarter. The bank cited a Nov. 14 announcement by Enbridge Inc. that it would reverse the Seaway pipeline to boost the flow of oil from Cushing to the Gulf of Mexico. The storage hub in Oklahoma is the delivery point for New York-traded crude futures.
--With assistance from Ben Sharples in Melbourne and Yee Kai Pin in Singapore. Editors: John Buckley, Raj Rajendran
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