WTI Drops to Pare Weekly Gain After Biggest Rally in Six Months
By Ben Sharples - May 3, 2013
West Texas Intermediate crude fell, paring a weekly advance, as traders awaited U.S. jobs data that may signal the economic recovery is accelerating.
Futures slid as much as 0.4 percent in New York a day after climbing 3.3 percent in the largest advance since Nov. 6. U.S. applications for unemployment benefits dropped to the lowest in five years, data from the Labor Department showed yesterday. A government report today may show employers boosted hiring in April. OPEC will hold off increases in shipments this month as weaker demand in the U.S. and Europe counters rising consumption in Asia, according to Oil Movements, a tanker tracker.
“The jobless claims data may give some insight into the fact that the jobs markets might not be as weak as some traders previously expected,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The evidence is still of a moderating tone in both the U.S. and Chinese economies.”
WTI for June delivery fell as much as 33 cents to $99.66 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.69 at 1:16 p.m. Singapore time. The volume of all contracts traded was 40 percent below the 100-day average. Futures surged $2.96 yesterday to $93.99, the highest closing price since April 29, and are up 0.7 percent this week.
Brent for June settlement slid 26 cents to $102.59 a barrel on the London-based ICE Futures Europe exchange. It rose $2.90, or 2.9 percent, to $102.85 yesterday. The European benchmark was at a premium of $8.90 to WTI. It closed at $8.86 yesterday, the narrowest gap since Dec. 30, 2011.
Technical Momentum
WTI may extend gains as a measure of technical momentum advances. On the daily chart, the moving average convergence- divergence indicator yesterday climbed above zero for the first time in three weeks, according to data compiled by Bloomberg. Futures rallied to about $98 a barrel after similar patterns in December and March.
U.S. payrolls probably increased by 140,000 workers after an 88,000 gain in March, according to the median forecast of economists surveyed by Bloomberg News before today’s Labor Department report. The unemployment rate stayed at 7.6 percent, matching March’s reading that was the lowest since December 2008, the survey showed.
U.S. Inventories
WTI may decline next week after U.S. crude stockpiles reached an 82-year high, a separate Bloomberg survey showed. Sixteen of 34 analysts and traders, or 47 percent, forecast futures will drop through May 3. Twelve respondents, or 35 percent, projected a gain and six said there would be little change.
Crude inventories rose by 6.7 million barrels last week to 395.3 million, the Energy Information Administration said May 1. Supplies were last at that level in 1931, based on monthly figures.
The Organization of Petroleum Exporting Countries will ship 23.7 million barrels a day in the four weeks to May 18, little changed from the previous period, Oil Movements said yesterday in an e-mailed report. The figures exclude Angola and Ecuador. U.S. crude imports by tanker have fallen about 13 percent this year, the consultant said.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
