Oil supplies fell 3.13 million barrels to 370.7 million last week, the American Petroleum Institute said late yesterday. Additional support for crude prices came as the dollar fell to the lowest level against the euro since March, bolstering demand for commodities as an alternative investment.
Oil rose for a second day after an industry group reported U.S. crude stockpiles dropped for the second week in a row and the dollar declined.
“We saw some gains in the price in reaction to the API decrease,” said Ken Hasegawa, a commodity derivative sales manager at brokers Newedge in Tokyo. “$60 is the main resistance so it may be tough to go higher.”
Crude oil for June delivery rose as much as 95 cents, or 1.6 percent, to $59.80 a barrel, and traded at $59.75 on the New York Mercantile Exchange at 10:56 a.m. in Singapore. Yesterday, it climbed as much as 2.7 percent to $60.08 a barrel before closing at $58.85, the highest settlement since Nov. 11.
“The major play seems to be the weakening dollar,” said Mike Sander, an investment adviser at Sander Capital Advisors Inc. in Seattle. “If the dollar continues to weaken to $1.40 euro or worse, oil will be pressured to go higher.”
The dollar traded at $1.3686 per euro at 9:09 a.m. in Tokyo, after dropping 0.5 percent yesterday and touching $1.3707, the weakest level since March 23. China Imports Oil was also supported yesterday as China, the world’s second-biggest energy-consuming country, said crude imports increased by 14 percent in April. Deliveries reached 16.17 million metric tons last month, or 3.9 million barrels a day, the Chinese customs department reported.
The country also reported today that industrial output in April rose 7.3 percent from a year earlier. Still, electric generation in the country fell 3.5 percent from a year earlier. The U.S. Energy Department report on inventories is expected to show a 1 million barrels gain, according to an analysts’ survey. Totals from the API and the government moved in the same direction 75 percent of the time over the past four years, Bloomberg data shows.
Supplies rose to 375.3 million barrels in the week ended May 1, the highest since September 1990, the Energy Department said on May 6. API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Analysts were split over whether gasoline stockpiles rose or fell last week. Supplies of distillate fuel, a category that includes heating oil and diesel, probably increased 1.25 million barrels, according to the Bloomberg News survey. The department is scheduled to release its weekly petroleum inventory report today at 10:30 a.m. in Washington.
Gasoline Demand - Gasoline demand in the U.S. is forecast to average 9.07 million barrels a day during the summer, 0.7 percent higher than the same period in 2008, the Energy Department said yesterday in its Short-Term Energy Outlook.
Gasoline futures for June delivery rose 2.79 cents, or 1.7 percent, to $1.6958 a gallon at 10:33 a.m. in Singapore on the Nymex. The contract yesterday dropped 1.23 cents, or 0.7 percent, to settle at $1.6679 a gallon.
Brent crude oil for June settlement gained as much as $1.10, or 1.9 percent, to $59.04 a barrel on London’s ICE Futures Europe exchange at 10:42 a.m. in Singapore. It declined 0.8 percent to end the session at $57.94 a barrel yesterday.