WTI Gains for Second Day as U.S. Stockpiles Shrink

West Texas Intermediate rose for a second day after an industry report showed crude inventories declined in the U.S., the world’s biggest oil consumer. Brent climbed in London amid reports of worsening security in eastern Libya. 

Futures advanced as much as 0.6 percent in New York. Crude stockpiles fell by 1.4 million barrels last week as supplies at Cushing, Oklahoma, the delivery point for WTI, slid 300,000 barrels, the American Petroleum Institute said yesterday. Government data today is forecast to show a 250,000 barrel drop nationwide, according to a Bloomberg News survey. Oil companies concerned over fighting in Libya’s eastern city of Benghazi are evacuating workers, state-run news agency Lana reported. 

“WTI has been supported by persistent crude stockpile draws at Cushing at the end of the spring,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said by e-mail. 

WTI for July delivery climbed as much as 64 cents to $103.30 a barrel in electronic trading on the New York Mercantile Exchange and was at $103.28 at 9:38 a.m. London time. The contract rose 19 cents to $102.66 yesterday. The volume of all futures traded was about 6 percent below the 100-day average for the time of day. Prices are up 4.9 percent this year. 

Brent for July settlement was 36 cents higher at $109.18 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $5.91 to WTI on ICE, compared with $6.16 yesterday.

Crude Supplies

WTI increased 3 percent in May, the first monthly advance since February, as inventories shrank for the 16th time in 17 weeks at Cushing, according to the Energy Information Administration. Stockpiles at the largest U.S. storage hub have declined since the southern leg of the Keystone XL pipeline began moving oil to Gulf Coast refineries in January. 

“The low inventory at Cushing is supporting the oil market,” Ken Hasegawa, an energy trading manager at Newedge Group in Tokyo, said by phone. “The API data showed some decrease in crude stocks, and the market started with gains.” 

Crude supplies nationwide probably fell to about 392.7 million barrels in the seven days ended May 30, according to the median estimate in the Bloomberg survey of 10 analysts. They were at 399.4 million through April 25, the most since the EIA, the Energy Department’s statistical arm, began publishing weekly data in 1982. 

Gasoline stockpiles expanded by 800,000 barrels last week, said the API, which collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. A 400,000 barrel increase is projected for the EIA data, the survey shows.

Benghazi Violence

“Libya has been breaking down in recent weeks and oil production is down to negligible levels,” Olivier Jakob, managing director at Petromatrix GmbH, said by e-mail 

Many foreign oil companies in the Wahat area recently began evacuating their workers because of the events in Benghazi, state-run Libyan news agency Lana reported today, without naming the companies.

An attempt to assassinate ex-General Khalifa Haftar, who is fighting Islamist forces in Benghazi, killed three of his guards in the eastern town of Abiyar, SkyNews Arabia reported, citing people it didn’t identify. 

Libyan crude output rose to 162,000 barrels a day from 156,000 as protests stopped at the Zelten and Raguba fields in the Sirte area, according to Mohamed Elharari, a spokesman for state-run National Oil. The nation has become the smallest producer in the 12-member Organization of Petroleum Exporting Countries because of unrest in the past year.

Courtesy: WTI Gains for Second Day as U.S. Stockpiles Shrink Via bloomberg

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