Oil near two-week high on US supplies

Oil traded near its highest in two weeks in New York on forecasts that crude inventories fell in the US, the world’s largest consumer of the commodity. Brent surpassed $110 (Dh404) a barrel for the first time in 11 weeks.

West Texas Intermediate futures were little changed, recouping an earlier loss of 0.5 per cent. US crude stockpiles probably dropped 1.6 million barrels last week, according to a Bloomberg News survey of nine analysts before an Energy Department report today. Tropical storm Ernesto was forecast to become a hurricane as it heads for Mexico’s Bay of Campeche.

“The market has been bolstered by significant crude stock drawdowns reported in recent weeks,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said. “There’s probably a bit of additional support coming from Ernesto, set to become a hurricane by late tonight.”

Crude for September delivery was at $92.52 a barrel in electronic trading on the New York Mercantile Exchange at 1.12pm yesterday London time, having slid as much as 42 cents to $91.78 a barrel. It settled on Monday at $92.20, the highest level since July 19. Prices are 6.4 per cent lower this year.

European benchmark

Brent crude for September settlement rose above $110 a barrel for the first time since May 17. It climbed as high as $110.45, and was up 90 cents at $110.40 on the Londonbased ICE Futures Europe exchange. The European benchmark’s premium to West Texas Intermediate was at $17.89 from $17.35 on Monday.

Daily exports of North Sea Brent, Forties, Oseberg and Ekofisk crudes, which make up the Dated Brent benchmark, in September will be 7 per cent less than this month, loading programmes obtained by Bloomberg News show.