Oil Rises After 3-Day Decline; U.S. Fuel Inventories May Drop
Nov. 15 (Bloomberg) -- Crude oil rose after three days of decline on speculation that fuel inventories fell in the U.S. ahead of the Thanksgiving holiday, when a record number of drivers will take to the roads.
U.S. gasoline and distillate inventories, including heating oil and diesel, probably fell by 825,000 barrels last week, according to a Bloomberg News survey of 14 analysts. Oil fell 4.7 percent in New York in the last three days because crude stockpiles held above the seasonal average and because of mild weather in the U.S., the world's largest energy consumer.
"We may see oil higher 50 cents today, recovering from the sale," said Kenichiro Yamaguchi, chief operating officer for Petro Diamond Risk Management Ltd. in London, a unit of Mitsubishi Corp., Japan's largest trading company. "The statistics may be bullish in the U.S. today."
Crude oil for December delivery rose as much as 37 cents, or 0.6 percent, to $58.65 a barrel on the New York Mercantile Exchange. The contract traded at $58.41 a barrel at 9:49 a.m. in London. Brent crude gained 21 cents to $59.05 a barrel on London's ICE Futures exchange. The contract expires today.
A record 31.7 million Americans, or 11 percent of the U.S. population, are expected to drive this Thanksgiving holiday, according to estimates by the American Automobile Association, the nation's largest motoring organization. Motorists will account for 83 percent of the 38.3 million travelers expected during the Nov. 23-26 period, AAA said in a release.
The average price for unleaded gasoline at the pump in the U.S. was $2.229 a gallon on Nov. 13, about 2.8 percent lower than a year ago, according to AAA.
U.S. Inventories
U.S. distillate supplies, including heating oil and diesel, held 138.6 million barrels on Nov. 3, 10 percent more than the five-year average for the period, according to the Department of Energy
Crude oil supplies may have risen for a third week, gaining 275,000 barrels last week, based on the median estimate from the Bloomberg News analyst survey. Inventories have risen for five of the previous six weeks and held 334.7 million barrels on Nov. 3, 11 percent more than the five-year average for the period, according to the U.S. Department of Energy.
"Deliveries into the Strategic Petroleum Reserves have quietly resumed," The Schork Group Inc. of Villanova, Pennsylvania, said in an e-mailed report. "The total amount of oil sitting in U.S. hands is now 1.02 billion barrels," Schork said, "enough supply cover for the last six Novembers combined."
The Energy Department is scheduled to release its weekly inventory report at 10:30 a.m. in Washington.
Price Drop
Oil futures are down about 25 percent from the record $78.40 a barrel reached on July 14, because of a calmer-than-expected U.S. hurricane season and higher global stockpiles.
Jet stream winds bringing wind and rain to the Pacific Northwest will ensure "intensely cold weather will remain locked away" over northern Canada for several days, AccuWeather Inc. said in a forecast yesterday.
The Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's oil, agreed to cut production by 1.2 million barrels a day this month to stem rising stockpiles and sliding prices.
The OPEC crude oil basket price fell 23 cents to $55.19 a barrel yesterday, the group said in an e-mail. The price is a weighted average of 11 crude blends produced by OPEC nations.
To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net.