Crude rebounded in New York to trade near a 31-month high, reversing an earlier decline as U.S. equity-index futures advanced following company earnings reports that exceeded analyst estimates.
Oil recovered from a 1 percent decline as June futures on the Standard & Poor’s 500 Index gained as much as 0.5 percent, after companies including United Parcel Service Inc. and Ford Motor Co. reported higher-than-estimated earnings. Federal Reserve Chairman Ben S. Bernankeis due to hold his first press conference following a policy meeting of the Federal Open Market Committee that begins today.
“This will add some complexity to trading around the FOMC statement,” Olivier Jakob, managing director of Geneva-based consultant Petromatrix said in a report.
Crude for June delivery on the New York Mercantile Exchange was up 16 cents at $112.44 a barrel at 1:35 p.m. London time after falling as low as $111.12. Yesterday, it traded at $113.48, the highest since Sept. 22, 2008. Brent crude for June settlement on the London-based ICE Futures Europe exchange was up 49 cents at $124.15 a barrel, reversing yesterday’s 0.3 percent decline.
Futures slid earlier after Saudi Aramco Chief Executive Officer Khalid al-Falih said the world’s biggest crude exporter is concerned about the impact of prices on economic growth. Oil also declined with other commodities amid speculation that the Federal Reserve may end its bond-buying program. A government report tomorrow may show crude supplies in the U.S. increased last week, according to a Bloomberg News survey.
Economic Impact
Saudi Arabia is committed to maintaining 3 million to 4 million barrels a day of idle capacity, al-Falih said in Seoul.
“We are not comfortable with oil prices where they are today,” al-Falih said. “We’re concerned about the impact it could have on global economic growth.”
In Nigeria, voters will cast ballots in state governorship elections today amid sectarian tensions triggered in Africa’s top oil producer by the re-election of President Goodluck Jonathan on April 16. Voting will take place in 26 of 36 states to elect legislatures and governors, with the number of states under the control of the ruling People’s Democratic Party likely to shrink. Nigeria is the fourth-biggest source of U.S. crude imports so far this year, according to the Energy Department.
Brent Premium
“Nigeria’s production of sweet crude oil is definitely an exponential price factor now that Libya’s sweet crude oil production is out,” Bjarne Schieldrop, chief commodities analyst at Stockholm-based SEB AB, said in a note. “With a governorship election today in Nigeria we see little downside in Brent crude today.”
Brent traded at a premium of $11.71 a barrel to New York futures settling in the same month. The difference has shrunk from $13.05 a week earlier after supplies fell at Cushing, Oklahoma, the delivery point for U.S. contracts.
Stockpiles at Cushing dropped 770,000 barrels to 41.1 million in the week ended April 15, according to the Energy Department. Crude stockpiles nationwide fell 2.32 million barrels to 357 million, the first drop since February.
U.S. crude inventories climbed 1.5 million barrels last week, the seventh time in eight weeks, according to the median estimate of seven analysts surveyed by Bloomberg News before a government report tomorrow. The industry-funded American Petroleum Institute will publish its own data today.
U.S. gasoline supplies probably dropped 1 million barrels in the period ended April 21, the survey showed. Distillate fuel supplies, including diesel and heating oil, were estimated to have increased by 600,000 barrels.
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