Oil rises as equity gain boosts optimism

oil-rises-as-equity-gain-boostsOil rises as equity gain boosts optimismoptimism SINGAPORE: Crude oil rose for a second day as a surge in equity markets increased optimism that the global economy and fuel demand will recover soon.

U.S. and Asian stock markets gained on better-than-expected earnings and factory output data in Japan. Crude stockpiles jumped by 4.1 million barrels in the week ended April to 374.6 million barrels their highest level since September 1990, the Energy Department said yesterday.

“What drove the gains was the performance of equities and the weaker dollar,” said Toby Hassall, an analyst at Commodity Warrants Australia Ltd. in Sydney. “The crude numbers were overlooked to an extent.”

Crude oil for June delivery rose as much as 49 cents, or 1 percent, to $51.44 a barrel, and traded at $51.43 at 11:28 a.m. Singapore time in electronic trading on the New York Mercantile Exchange. It rose $1.05 to settle at $50.97 a barrel yesterday. Prices are up 15 percent this year.

Japan’s industrial output rose 1.6 percent from February, the first gain in six months and twice the pace predicted by economists. The news pushed Asian stocks higher.

Crude oil in New York has traded between $43.83 and $53.90 this month as inventories climbed and equities rebounded on speculation the economy will recover later this year.

Brent crude for June settlement climbed as much as 42 cents, or 0.8 percent, to $51.20 a barrel on London’s ICE Futures Europe. The contract rose 79 cents, or 1.6 percent, to end the session at $50.78 a barrel yesterday.

U.S. gasoline stockpiles dropped as refiners cut back their output. Motor fuel supplies declined 4.7 million barrels to 212.6 million last week, the biggest reduction since September, the Energy Department said. Stockpiles were forecast to climb by 200,000 barrels, according to a Bloomberg News survey.

Refineries operated at 82.7 percent of capacity, down 0.8 percentage point from the prior week. Analysts forecast that operating rates would climb 0.2 percentage point.

The gain in crude stockpiles left supplies 15 percent greater than the five-year average for the period. Stockpiles were forecast to increase by 1.8 million barrels, according to the median response of 14 analysts surveyed.

Inventories of distillate fuel, a category that includes heating oil and diesel, climbed 1.79 million barrels to 144.1 million. A gain of 1 million barrels was forecast.

Total daily fuel demand in the U.S. averaged 18.4 million barrels in the four weeks ended April 24, down 6.8 percent from a year earlier, the department said. Consumption of gasoline was down 0.5 percent and distillate use was 11 percent lower.

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Oil rises as equity gain boosts optimism

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