Bloomberg News

Oil Pares Second Monthly Gain After U.S. Crude Stockpiles Rise

November 30, 2011

Nov. 30 (Bloomberg) -- Oil fell from the highest in two weeks in New York after Standard & Poor’s cut credit ratings on some of the world’s biggest lenders, and amid signs of rising crude supplies in the U.S.

West Texas Intermediate futures slid as much as 0.9 percent, paring a second monthly gain. The industry-funded American Petroleum Institute said yesterday crude inventories climbed by 3.44 million barrels last week. S&P lowered the ratings of banks led by Goldman Sachs Group Inc., Bank of America Corp. and UBS AG. Prices rose yesterday after U.S. consumer confidence climbed the most in more than eight years and Iranian protesters vandalized the British Embassy’s compound in Tehran.

“The debt crisis is a very, very bearish factor in the market,” said Gerrit Zambo, a trader at Bayerische Landesbank in Munich who correctly predicted crude’s slump in September. “On the other hand, we’re at the start of winter now with some oil supplies at little bit tight, and some positive macro data in the U.S.”

Crude for January delivery fell as much as 87 cents to $98.92 a barrel in electronic trading on the New York Mercantile. It was at $99.27 at 10:30 a.m. in London. The contract yesterday advanced 1.6 percent to $99.79, the highest close since Nov. 16. Prices have risen 6.5 percent this month, after climbing 18 percent in October.

$100 Brent

Brent oil for January settlement was down 90 cents at $109.92 a barrel on the London-based ICE Futures Europe exchange. It closed yesterday up 1.7 percent at $110.82. The European benchmark contract’s premium to New York’s West Texas Intermediate was at $10.65, compared with yesterday’s close of $11.14 and a record $27.88 on Oct. 14.

Brent may average $100 a barrel next year as Libyan supply returns and new projects start, Hussein Allidina, an analyst at Morgan Stanley in New York, said in a report yesterday. Prices may be “significantly weaker” in the first half of next year, falling to as low as $85, Allidana said.

U.S. crude inventories rose to 339.2 million barrels as imports surged 10 percent in the week to Nov. 25, the API report showed. An Energy Department report today will probably show supplies increased 50,000 barrels, according to the median of responses to a Bloomberg News survey.

Gasoline stockpiles slipped 173,000 barrels to 209.4 million, according to the API. Distillate fuels, including diesel and heating oil, gained 1.35 million barrels to 139.5 million. Oil-product imports rose 8.5 percent, the group said.

Analysts in the Bloomberg survey predicted the Energy Department will say motor-fuel supplies climbed 1.45 million barrels while distillates declined 1.25 million. The department is scheduled to release its inventory data today at 10:30 a.m. in Washington.

“We’ve got profit-taking today off the rally driven by the attack on the U.K. embassy,” said Victor Shum, a senior principal at Purvin & Gertz Inc., a consultant in Singapore. “That provided support on top of the good economic data out of the U.S. The API data poured some cold water on that bullish news.”

--Christian Schmollinger in Singapore. Editors: John Buckley, Randall Hackley

To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net


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