Jan. 27 (Bloomberg) -- Oil traded near the highest price in a week, heading for the first weekly gain in three, amid signs of economic recovery in the U.S., the world’s biggest crude consuming nation.
Futures were little changed in New York after climbing for a second day yesterday. Orders for U.S. durable goods rose more than forecast in December, according to data from the Commerce Department. A separate report this week showed gasoline demand gained in the seven days to Jan. 20. Brent oil’s premium to West Texas Intermediate widened a second day.
“The data we’ve seen out of the U.S. over the last few months is indicating a recovery in the economy,” Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney, said by telephone today. “The spread between Brent and West Texas has blown out again. That suggests the potential for some supply disruption out of the Middle East is in the back of traders’ minds.”
Crude for March delivery was at $99.98 a barrel, up 28 cents, in electronic trading on the New York Mercantile Exchange at 1:24 p.m. Sydney time. The contract yesterday gained 30 cents to $99.70, the highest since Jan. 19. Prices are up 1.6 percent this week and are 17 percent higher in the past year.
Brent oil for March settlement was at $111.12 a barrel, up 33 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures was at $11.15, compared with $9.90 on Jan. 18 and a record $27.88 on Oct. 14.
Oil in New York has technical support along its 50-day moving average, around $99.28 a barrel today, according to data compiled by Bloomberg. Futures slid to an intra-day low yesterday of $99.23. Buy orders tend to be clustered close to chart-support levels.
“West Texas is in a key area between $99 and $102 so if we do see it trade up through $102.50 in the next few sessions we could well get a bit of a gallop on,” McCarthy said.
Bookings for long-lasting goods advanced 3 percent after rising 4.3 percent the prior month, the biggest back-to-back gains in almost a year, according to Commerce Department data released yesterday in Washington. Economists projected a 2 percent increase, according to a Bloomberg News survey.
Iranian President Mahmoud Ahmadinejad said his country is willing to revive talks on its nuclear program and accused Western countries of dodging discussions, the state-run Fars news agency reported. European Union foreign ministers agreed to ban oil imports from Iran starting July 1 to pressure the country over its nuclear program.
Iran has threatened to close the Strait of Hormuz in retaliation against the embargo on its oil exports. The waterway is a transit route for about a fifth of the world’s crude, according to the U.S. Department of Energy.
--With assistance from Yee Kai Pin in Singapore. Editors: Christian Schmollinger, Alexander Kwiatkowski
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