Oil Rises a Third Day as Industry Report Shows Stockpile Drop

Nov. 18 (Bloomberg) -- Oil advanced for a third day in New York after an industry report showed a decline in crude stockpiles in the U.S., the largest energy consumer.

The American Petroleum Institute said yesterday crude inventories fell by 4.37 million barrels last week to 333.1 million. The Energy Department will release its weekly supply report today in Washington.

“If we see a drop of that magnitude in the DOE report, I think that would be perceived as fairly bullish for the market,” said Toby Hassall, a research analyst with CWA Global Markets in Sydney. “You have to take into account what’s being going on in the Gulf with regards to shut-ins after the storm activity we’ve seen there.”

Crude oil for December delivery gained 44 cents, or 0.6 percent, to $79.58 a barrel in electronic trading on the New York Mercantile Exchange at 11:31 a.m. in Sydney. Yesterday, the contract rose 24 cents to settle at $79.14. Prices have gained 78 percent since the start of the year.

Energy producers in the U.S. idled about 43 percent of oil output in the Gulf of Mexico on Nov. 10 after Tropical Storm Ida made landfall, according to the Interior Department’s Minerals Management Service.

“It’s been a recovery story for the best part of this year,” Hassall said. “I think that recovery story should remain the driver for oil going forward.”

OPEC Output

The Organization of Petroleum Exporting Countries will leave its oil production target “as is” at a December meeting and will ask members for better adherence to quotas, Kuwait’s oil minister, Sheikh Ahmed al-Abdullah al-Sabah, said yesterday.

OPEC will meet on Dec. 22 in Luanda, Angola, to discuss output targets, after agreeing to leave them unchanged at the past three meetings.

The Energy Department report will probably show stockpiles of crude oil climbed 300,000 barrels, according to the 17 analysts who provided crude estimates. Ten respondents forecast a gain, and seven said there would be a decline. Those looking for an inventory drop focused on disruptions caused by Hurricane Ida.

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.

“We are seeing strong demand growth out of the emerging economies,” Hassall said. China last week reported October net oil imports of 18.98 million tons, the second-highest volume on record.

Oil declined as much as 1 percent yesterday as the dollar rose against the euro. The U.S. currency traded at $1.4879 per euro at 11:31 a.m. in Sydney, from $1.4876 yesterday.

Brent crude oil for January settlement rose 21 cents, or 0.3 percent, to $78.97 a barrel on the London-based ICE Futures Europe exchange yesterday.