Oil Is Little Changed on Forecast for Rising Gasoline Supplies

By Grant Smith

July 21 (Bloomberg) -- Crude oil traded little changed around $64 a barrel in New York before a report forecast to show that gasoline supplies expanded in the U.S.

Gasoline inventories in the world’s largest energy market probably rose by 850,000 barrels from 214.6 million barrels, a Bloomberg survey showed. That would be the sixth week of gains during what is typically peak time for demand. Stockpiles of crude likely fell for a 10th week out of 11, the survey showed.

“We haven’t yet seen the optimism materialize in increased consumption of oil,” said Thina Saltvedt, an analyst at Nordea Bank AB in Oslo. “Better than expected macro indicators are keeping hopes up, but we need to see some improvement in demand.”

Crude oil for August delivery was at $64.21 a barrel, 36 cents higher on the New York Mercantile Exchange at 11:18 a.m. London time. Oil has fallen 12 percent from an eight-month closing high of $72.68 on June 11.

The August contract expires today. The more-active September contract fell as much as 76 cents, or 1.2 percent, to $64.53 a barrel.

U.S. crude oil stockpiles probably declined by 2.25 million barrels in the week ended July 17, according to the median of 12 estimates by analysts before an Energy Department report scheduled for 10:30 a.m. tomorrow in Washington.

Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose by 1.5 million barrels from 159.3 million.

Equity-Driven Rally

“We may be recovering and we may have sequential changes that are positive, but year-on-year levels of activity are showing wide output gaps,” Harry Tchilinguirian, a senior oil markets analyst at BNP Paribas, said in a Bloomberg Television interview. “You have to stop and think if the rally we’ve been having, of course equity-driven, is going to be sustainable.”

Refiners in China, the world’s largest energy consumer after the U.S., increased operating rates for an eighth week to 85.1 percent of capacity on July 16, said CBI China, a Shanghai- based commodities researcher.

Brent crude for September settlement rose 0.3 percent to $66.61 a barrel on London’s ICE Futures Europe Exchange at 11:18 a.m. local time.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.netGrant Smith in London at gsmith52@bloomberg.net