March 28th, 2013

West Texas Intermediate traded near its highest in five weeks and was set for a quarterly gain after U.S. government data showed refineries raised operating rates.

Crude oil futures rose as much as 0.4 percent in New York and have gained 5.2 percent in the past three months. Refineries ran at 85.7 percent of capacity last week, up 2.2 percentage points from the prior week and the most since January, figures from the Energy Department showed yesterday. U.S. crude stockpiles increased 3.3 million barrels, according to the report. They were forecast to gain 1.33 million barrels, an earlier Bloomberg News survey showed.

“Fundamentals remain well-balanced,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark. “Global oil demand remains near all-time highs.”

WTI for May delivery traded 26 cents higher at $96.84 a barrel in electronic trading on the New York Mercantile Exchange at 12:10 p.m. London time, having earlier climbed as much as 36 cents to $96.94 a barrel. The volume of all futures traded was 43 percent below the 100-day average. The contract rose 0.3 percent yesterday to $96.58, the highest close since Feb. 19. Prices are set for their fourth weekly gain and are 5.1 percent higher this month.

Brent for May settlement was at $109.78 a barrel, up 9 cents, on the London-based ICE Futures Europe exchange. The volume of all contracts traded was 24 percent below the 100-day average. The European benchmark grade was at a premium of $12.93 to WTI. It settled at $13.02 on March 26, the narrowest closing level since July.

Fuel Supplies

U.S. gasoline inventories slid 1.6 million barrels last week, the report from the Energy Department’s Energy Information Administration showed. They were projected to fall 1 million barrels, according to the median estimate of 12 analysts in the Bloomberg survey. Distillate supplies, a category that includes heating oil and diesel, dropped 4.5 million barrels, compared with the survey’s forecast of an 850,000-barrel decline.

Stockpiles at Cushing, Oklahoma, the biggest storage hub in the U.S. and delivery point for WTI, rose 439,000 barrels to 49.5 million barrels, according to the EIA report. U.S. oil output advanced 1,000 barrels to 7.15 million, near the 20-year high of 7.16 million reached in the week ended March 8.

U.S. energy self-sufficiency climbed to the highest annual rate since 1991, according to data from the EIA. The nation produced 88 percent of its own energy in December, the highest rate since February 1987.

Fibonacci Support

WTI may rise toward $100 after prices settled above a key Fibonacci level for a second day, according to a technical analysis from Iitrader.com.

The May WTI contract has climbed for the past four sessions and settled above $95.55 a barrel for the past two. That’s the 61.8 percent retracement level from a March 4 low of $89.79 on a three-month Fibonacci study. The price may test $100 if it breaches $97.92, the Feb. 20 intraday high, said Bill Baruch, a senior market strategist at Iitrader.com, a Chicago commodity trading firm.

A breach below the 50 percent Fibonacci retracement of $94.44 may set a bearish trend for oil, Baruch said. The Fibonacci sequence of numbers is used by traders to predict areas of support and resistance as markets repeat earlier movements.

African Crude

Asian refiners will increase imports of West African crude for loading in April. India boosted purchases of Nigerian grades to the most in 10 months, while Japan bought a record amount.

Asia bought 57 cargoes totaling 1.74 million barrels a day from Angola, Nigeria, Equatorial Guinea, Republic of Congo, Gabon, Ghana and Democratic Republic of Congo, according to a survey of five traders and an analysis of loading plans obtained by Bloomberg News. That compares with 1.6 million in March and is the most since 1.8 million in January.

“Refineries are building up for the summer drive time,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney, who predicts West Texas crude has technical resistance at $98.50 a barrel. “Oil inventories still remain high.”

- Grant Smith in London at Bloomberg.