(For Bloomberg fair value curves, see CFVL <GO>)
June 3 (Bloomberg) -- West Texas Intermediate swung between gains and losses on estimates that crude stockpiles fell in the U.S., the biggest oil consumer. Brent crude fell as Libya said one of its ports would reopen.
Futures were little changed in New York after declining the past two days. Crude inventories probably dropped by 1 million barrels last week, according to a Bloomberg News survey before an Energy Information Administration report tomorrow. Supplies at Cushing, Oklahoma, a storage hub, are at their lowest in more than five years. Libya’s Hariga export terminal may reopen within two days after protests prevented loadings, National Oil Corp. said yesterday.
“WTI is reacting to low Cushing stocks,” Amrita Sen, chief oil market strategist at Energy Aspects Ltd. in London, said by e-mail. Inventories at the largest U.S. oil-storage center are near “operational minimum” levels, she said.
WTI for July delivery was at $102.48 a barrel in electronic trading on the New York Mercantile Exchange, up 1 cent, at 9:15 a.m. London time. The contract slid 24 cents to $102.47 yesterday, the lowest close since May 20. The volume of all futures traded was 30 percent below the 100-day average for the time of day. Prices have increased 4.1 percent this year.
Brent for July settlement was 21 cents lower at $108.62 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a $6.18 premium to WTI on ICE. The spread closed at $6.36 yesterday, the narrowest in four days.
U.S. Stockpiles
WTI advanced 3 percent in May, the first monthly gain since February, as crude inventories shrank at the delivery point for New York contracts. Supplies at Cushing fell to 21.7 million barrels through May 23, according to the EIA, the Energy Department’s statistical arm. That’s the lowest level since November 2008.
Crude stockpiles nationwide probably decreased to about 392 million barrels in the seven days ended May 30, according to the Bloomberg survey of seven analysts. Supplies were at 399.4 million through April 25, the most since the EIA began publishing weekly data in 1982.
“We should be coming into a period of draws as we really get into this summer demand period,” said Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney who predicts investors may sell West Texas contracts if prices climb to about $104.50 a barrel.
Gasoline inventories probably expanded by 200,000 barrels last week, the survey shows. The peak U.S. driving season typically starts from Memorial Day, which was on May 26, to Labor Day in early September.
Chinese Factories
A Chinese manufacturing gauge rose to a four-month high in May. China’s manufacturing Purchasing Managers’ Index was at 49.4 in May, up from 48.1 in April, according to HSBC Holdings Plc and Markit Economics. That’s below the median economist estimate of 49.7. Readings below 50 signal contraction.
China will account for about 11 percent of global oil demand this year, compared with 21 percent for the U.S., forecasts from the International Energy Agency in Paris show.
In Libya, newly-elected Prime Minister Ahmed Maiteg held his first government meeting in Tripoli yesterday, pledging to fight terrorism and restore security, according to LANA, the official news agency. The nation has become the smallest producer in the 12-member Organization of Petroleum Exporting Countries in the past year as unrest disrupted output and shipments.
Brent may extend losses after settling yesterday below technical support along its 200-day moving average, at about $109 a barrel, data compiled by Bloomberg show. Futures declined in early May after a similar pattern on April 28. Investors typically sell contracts when chart-support levels fail.