Oil rose a sixth day in New York on speculation Iran's nuclear plans threaten Middle East stability and an offer to resign by Italy's Prime Minister Silvio Berlusconi brings Europe closer to solving its debt crisis.
Futures advanced as much as 0.5 per cent, matching the longest run of gains since the six days ended Nov. 8, 2010. The US may pursue additional sanctions against Iran following release of a United Nations report that concludes the Islamic Republic was working to develop a nuclear weapon, according to two US officials. Fuel stockpiles fell last week, the American Petroleum Institute said yesterday.
"This current supply-shock potential that the markets are looking at with Iran has pushed the price well above our outlook," said David Lennox, a resource analyst at Fat Prophets in Sydney, who had forecast oil to trade from $US80 to $US90 a barrel. "The situation in Europe will still take some time for the corrective activities to flow through to the real economy."
Crude oil for December delivery gained as much as 52 cents to $US97.32 a barrel in electronic trading on the New York Mercantile Exchange and was at 97.19. The contract yesterday advanced $US1.28, or 1.3 per cent, to $US96.80, the highest settlement since July 28. Prices are 6.4 per cent higher the past year.
Brent oil for December settlement gained 51 cents, or 0.4 per cent, to $US115.51 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $US18.32 to New York crude, compared with a record settlement of $US27.88 on Oct. 14.
Fuel stockpiles
Oil in New York has technical resistance around $US99.60 a barrel, according to data compiled by Bloomberg. That's the 38.2 per cent Fibonacci retracement of the price drop from the 2011 high in May to the low in October, and is close to the upper Bollinger Band on the daily chart. Sell orders tend to be clustered near chart-resistance levels.
US gasoline stockpiles dropped 1.5 million barrels last week, the American Petroleum Institute said. An Energy Department report today may show they rose 1 million barrels, according to a Bloomberg News survey.
Supplies of distillate fuel, a category that includes heating oil and diesel, fell 2.9 million barrels, the API said. They may decrease 2.2 million barrels, according to the median of 13 analyst estimates before today's report.
Crude inventories climbed 148,000 barrels, the API said. Analysts forecast a gain of 500,000 barrels in the survey. The US is the world's biggest oil consumer, using 19.1 million barrels a day in 2010, or 21 per cent of global consumption, according to BP Plc's Statistical Review.
UN report
The industry-funded 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.
The International Atomic Energy Agency, drawing on evidence collected over eight years, reported yesterday that Iran carried out "work on the development of an indigenous design of a nuclear weapon including the testing of components." Iran is OPEC's second largest oil producer.
The Organization of Petroleum Exporting Countries raised estimates for global oil demand to 2015 after a swifter-than- forecast economic rebound. Worldwide consumption will increase by 5.3 per cent to 92.9 million barrels a day in the next four years, led by emerging Asian economies, OPEC said yesterday in its annual World Oil Outlook. The 2015 estimate is 1.9 million barrels more than last year's forecast. Europe's debt crisis and slowing US growth pose risks, the group said.
Oil prices also rose after Berlusconi said he'd step down as soon as parliament passed austerity measures pledged to European Union allies in a bid to convince investors Italy can curb record borrowing costs.