Thursday, March 11, 2010

Oil Trades Below $82 After Rising on U.S. Fuel Supply Decline

March 11 (Bloomberg) -- Crude oil traded below $82 a barrel after rising on a government report that showed U.S. fuel supplies declined, adding to signs of demand recovery in the biggest energy-consuming nation.

Oil rose to an eight-week high yesterday as gasoline inventories dropped 2.96 million barrels last week, the Energy Information Administration said. Crude stockpiles increased 1.4 million barrels compared with a Bloomberg News survey forecast of a 2 million-barrel gain. Prices also gained as total Chinese exports climbed 46 percent in February.

“The Chinese trade data was supportive and the EIA data contained a number of positive elements as well,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “Demand in the U.S. is still weak, there is no doubt about that. It looks to be in the slow recovery mode.”

Crude oil for April delivery traded at $81.74 a barrel, down 35 cents, in electronic trading on the New York Mercantile Exchange at 11:22 a.m. Sydney time. Yesterday, the contract rose 60 cents, or 0.7 percent, to $82.09, the highest settlement since Jan. 11.

Oil also advanced after the Organization of Petroleum Exporting Countries predicted members will need to produce more oil than previously forecast. The 12-member group will need to pump 28.94 million barrels a day to satisfy demand in 2010, according to a report yesterday. That’s about 190,000 barrels a day more than last month’s projection.

Fuel Consumption

Total U.S. fuel consumption increased 0.2 percent to 19.7 million barrels a day last week, the highest level since August, the Energy Department report showed. Refineries operated at 80.7 percent of capacity, falling for the first time in five weeks.

Supplies of distillate fuel, a category that includes heating oil and diesel, decreased 2.22 million barrels to 149.6 million, the department said. Stockpiles were forecast to drop by 1 million barrels.

Chinese exports climbed 46 percent in February from a year before after a 21 percent advance in January, the customs bureau reported on its Web site yesterday. The country’s passenger car sales rose 55 percent last month from a year earlier, the China Association of Automobile Manufacturers said this week. China is the world’s second-biggest oil-consuming country after the U.S.

Brent crude oil for April delivery rose 57 cents, or 0.7 percent, to end the session at $80.48 a barrel on the London- based ICE Futures Europe exchange yesterday.