Oil rose for the second time in three days before a report that may show the U.S. economy expanded more than previously estimated last quarter. West Texas Intermediate climbed as much as 2.9 percent in New York, paring this year’s decline to 43 percent while Brent gained in London. The U.S. economy expanded 4.3 percent in the third quarter from a year earlier, a Bloomberg News survey shows. Saudi Arabia, OPEC’s biggest producer, doesn’t plan to pump less “whatever the price is,” Oil Minister Ali Al-Naimi told the Middle East Economic Survey yesterday. Crude is set for the biggest annual loss since 2008 amid the highest U.S. output in more than three decades and signs of slowing global demand growth. Stockpiles in the U.S., the world’s largest oil consumer, probably dropped for a second week, a separate Bloomberg survey showed before weekly government data tomorrow. Markets close on Dec. 25 in London and New York for Christmas. “We are expecting a positive revision to U.S. growth and markets are pricing it in,” Michael Hewson, London-based chief market analyst at CMC Markets Plc, said by phone. “Given how far prices have fallen since the summer, the downside is limited in the short term.” WTI for February delivery increased as much as $1.59 to $56.85 a barrel in electronic trading on the New York Mercantile Exchange and was at $56.17 at 11:21 a.m. London time. The volume of all futures traded was about 9 percent below the 100-day average for the time of day. OPEC Decision Brent for February settlement gained as much as 89 cents, or 1.5 percent, to $61 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $4.77 to WTI. Economists surveyed by Bloomberg predict annualized growth in the U.S. economy will be revised up to 4.3 percent for last quarter in a Commerce Department report today. That compares with a previous estimate of 3.9 percent. The U.S. is the world’s biggest consumer. OPEC’s decision on Nov. 27 to maintain its output ceiling was “part of its effort to defend its market share,” Iraqi Oil Minister Adel Abdul Mahdi said in an interview yesterday. Production cuts to support prices in 2008 didn’t prevent a decline in its market share, he said. WTI dropped a record 54 percent that year. Defensive Strategy OPEC pumped 30.56 million barrels a day in November, exceeding its collective target of 30 million for a sixth straight month, a separate Bloomberg survey of companies, producers and analysts shows. Saudi Arabia doesn’t intend to cut output, Al-Naimi said in the interview with MEES. “Whether it goes down to $20, $40, $50, $60, it is irrelevant,” he was cited as saying. The nation pumped 9.65 million barrels a day last month. “It paints a very pessimistic picture for oil prices, and what it means for non-OPEC supply,” Gareth Lewis-Davies, an analyst at BNP Paribas SA in London, said by phone, referring to Al-Naimi’s comments. Iraq plans to boost production to 4 million barrels a day next year as the Organization of Petroleum Exporting Countries refuses to cede market position, Abdul Mahdi said in the interview. In the U.S., crude inventories probably shrank by 2.5 million barrels to 377.4 million last week, according to the median estimate in a Bloomberg survey of seven analysts before the Energy Information Administration’s report. Production expanded to 9.14 million barrels a day through Dec. 12, the highest level in weekly data that started in January 1983.
Posted on: Wed, 24 Dec 2014 14:18:03 +0000
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