Oil gained for a second day in New York on speculation a strengthening U.S. economy will increase fuel demand and the Obama administration will refrain from easing sanctions against Iran.
Futures rose as much as 0.5 percent, extending yesterday advance, the first in seven days. The U.S. won’t support relaxing sanctions that are hobbling Iran’s oil exports when negotiators meet in Baghdad tomorrow for a second round of talks on the Persian Gulf nation’s nuclear program, according to officials who declined to be identified because of the issue’s sensitivity. Existing U.S. home sales climbed last month, according to a Bloomberg News survey before a report today.
“We’ve still got problems in the Middle East,” Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity- markets newsletter in Sydney, said in a Bloomberg Television interview. “I can start to see a little level of optimism creeping into the market, and that should support the price. We are at the lower end, and I think we’re heading back through to $100 a barrel” for New York crude, he said.
Crude for June delivery, which expires today, rose as much as 44 cents and was 0.3 percent higher at $92.82 a barrel in electronic trading on the New York Mercantile Exchange at 3:05 p.m. Singapore time. The more-actively traded July contract climbed 24 cents to $93.10. Front-month futures rose 1.2 percent yesterday and are down 6 percent this year.
Brent oil for July settlement was at $109.24 a barrel, up 43 cents, on the London-based ICE Futures Europe exchange. The front-month price for the European benchmark contract was at a premium to New York crude of $16.13, up from $15.95 yesterday.
Oil rebounded in New York yesterday after futures reached technical support at $90.42 a barrel, data compiled by Bloomberg shows. For the most-actively traded July contract, that’s the 38.2 percent Fibonacci retracement of the rise from $77.40, the intraday low of Oct. 4 last year, to the March 1 high of $111.49. Buy orders tend to be clustered near chart-support levels.
The U.S., U.K., France, China, Russia and Germany will hold talks tomorrow with Iran, the second-biggest producer in the Organization of Petroleum Exporting Countries, as Western sanctions hamper Iran’s ability to export and get paid for crude. The U.S. is in no hurry to ease the pressure before a deal is done, the officials said.
New York oil has fallen 12 percent this month amid concern the global economy is slowing, threatening fuel demand. Data today may signal growth in the U.S. Existing-home sales increased 2.9 percent to a 4.61 million annual rate in April compared with March, according to a Bloomberg News survey before a report from the National Association of Realtors.
U.S. crude inventories probably rose 1.5 million barrels last week, a separate Bloomberg News survey showed before an Energy Department report tomorrow. It will be the ninth week of gains. Gasoline supplies may have climbed 500,000 barrels, according to the median estimate of nine analysts.
The industry-funded American Petroleum Institute will release separate stockpile data today.
A tropical depression in the Pacific may develop into a storm today and a hurricane tomorrow that threatens Mexico’s southwest coast, while Atlantic Tropical Storm Alberto moves away from the U.S. Southeast. The depression, 505 miles (810 kilometers) south-southwest of Acapulco, Mexico, in the Pacific, has top winds of 35 miles per hour, according to a National Hurricane Center advisory issued before 11 p.m. East Coast time yesterday.
To contact the reporter on this story: Ben Sharples in Melbourne at email@example.com
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at firstname.lastname@example.org