 Crude Oil Trades Little Changed After Rising on Platform Blast
Bloomberg - 9/3/2010 5:10:00 AM
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Oil traded little changed after rising as pending home sales unexpectedly climbed and a blast on a Gulf of Mexico platform prompted speculation that tighter regulations will cut production.
Futures advanced 1.5 percent yesterday as U.S. equities increased after the National Association of Realtors said that the number of contracts to purchase previously owned houses in the U.S. rose 5.2 percent in July. Crude also gained after the explosion on a platform owned by Mariner Energy Inc.
“The market is worried about the new issue with the damage in the Gulf of Mexico,” said Peter McGuire, managing director at CWA Global Markets Pty in Sydney. “We’re also worried about the possibility of hurricane activity in that whole region.”
The October contract traded at $74.88 a barrel, down 14 cents, in electronic trading on the New York Mercantile Exchange at 9:50 a.m. Sydney time. Yesterday, it rose $1.11 to $75.02. Prices are down 0.4 percent for the week and have dropped 5.6 percent this year.
Oil rebounded after the U.S. Coast Guard reported the blast, which occurred 90 miles (145 kilometers) off the Louisiana coast. The Obama administration instituted a temporary moratorium on deep-water oil and gas drilling in the Gulf on May 27 in reaction to a BP Plc oil spill, the worst in U.S. history.
Brent crude for October settlement rose 58 cents, or 0.8 percent, to end the session at $76.93 a barrel on the London- based ICE Futures Europe exchange yesterday.
Equities Climb
U.S. stocks rose, with the Standard & Poor’s 500 Index building on its biggest rally in almost two months, after retail sales improved, initial jobless claims fell and pending home sales unexpectedly increased.
Initial jobless claims fell by 6,000 to 472,000 in the week ended Aug. 28, in line with the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed. Applications exceeded the 463,000 average so far this year.
The Standard & Poor’s 500 Index gained 0.9 percent in New York, and the Dow Jones Industrial Average climbed 0.5 percent.
“A surprise jump in home sales and a better-than-expected jobless claims number tempered fears the economic recovery is weakening,” Ben Potter, a market strategist at IG Markets in Melbourne, said in an e-mailed note today. “Last night’s stronger data, coupled with the good manufacturing figures seems to have eased concerns over the economy.”
Manufacturing in the U.S. and China, the world’s biggest energy-consuming countries, accelerated in August at a faster pace than forecast.
Hurricane Earl
Hurricane Earl bore down on North Carolina with winds of 125 miles per hour, prompting coastal evacuations and emergency declarations, while storm warnings were issued in Bermuda as Tropical Storm Fiona advanced. Earl was 245 miles south of Cape Hatteras moving north at 18 mph, the National Hurricane Center said at 2 p.m. Miami time.
U.S. crude oil stockpiles climbed 3.43 million barrels to 361.7 million last week, an Energy Department report showed Sept. 1. Supplies were projected to increase 1.2 million barrels, according to the median of 16 analyst estimates in a Bloomberg News survey.
Refineries operated at 87 percent of capacity, down 0.7 percentage point from the prior week, the department said. It was the lowest level since April. Refiners often idle units for maintenance in September and October as gasoline demand falls and before heating-oil use increases.
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