Oil up on positive US data and hope for Spain
Oil rose a second day in New York on signs Germany may ease its resistance to a Spanish bailout and after industrial production rose more than forecast in the US.
Futures advanced as much as 0.7 per cent after two German lawmakers said the country is open to Spain seeking a precautionary credit line.
Output at US factories, mines and utilities rose 0.4 per cent in September, twice as much as the median forecast of economists surveyed by Bloomberg, data from the Federal Reserve in Washington showed yesterday.
‘‘The proposal for a line of credit seems like a positive compromise,’’ said Ric Spooner, a chief market analyst at CMC Markets in Sydney.
‘‘It may mean, as far as bondholders and the market are concerned, there’s a back-up facility there to be used.
''There was also a positive response to the US industrial production figures, which were a little higher than expected.’’
Crude for November delivery climbed as much as 67 cents to $US92.76 a barrel in electronic trading on the New York Mercantile Exchange and was at $US92.48 at 11.51am AEDT.
The contract yesterday rose 24 cents to $US92.09, the highest settlement since October 9. Prices are down 6.4 per cent this year.
Brent oil for December settlement rose 2 cents to $US114.02 a barrel on the London-based ICE Futures Europe. November futures expired yesterday.
The front-month European benchmark grade’s premium to the corresponding West Texas Intermediate contract was at $US21.12 a barrel. It settled at $US23.95 on October 15, the widest gap since reaching a record on October 14, 2011.
The comments in Germany by Michael Meister, a deputy caucus leader of Chancellor Angela Merkel’s Christian Democratic coalition, and Norbert Barthle, a budget spokesman for her party, may signal a reversal of Finance Minister Wolfgang Schaeuble’s public position.
Mr Schaeuble cautioned Spain against seeking aid on top of its bank bailout as recently as last month.
The European Union accounted for 16 per cent of the world’s oil consumption last year, according to BP’s Statistical Review of World Energy. The US used 21 per cent.
US crude stockpiles rose 3.7 million barrels last week, data from the American Petroleum Institute showed. They are forecast to climb 1.5 million barrels, according to the median estimate of nine analysts in a Bloomberg survey before an Energy Department report today.
Gasoline inventories fell 1.2 million barrels, the API data showed. They are projected to rise 500,000 barrels in the government report.
Distillate supplies, a category that includes diesel and heating oil, gained 1.8 million barrels, according to the API, compared with an estimated decline of 1.5 million in the survey.
Oil’s advance in New York may stall along its middle Bollinger Band around $US93.11 a barrel, according to data compiled by Bloomberg. Last week’s climb halted near this indicator, signalling technical resistance, where sell orders tend to be clustered.