By Ben Sharples - Oct 17, 2011 7:50 AM GMT+0700
Oil extended gains from the highest close in almost a month in New York after European leaders promised to agree on a strategy for resolving their debt crisis and U.S. economic data eased concerns about a recession.
Futures advanced as much as 1.1 percent, adding to last week’s 4.6 percent rise, after Group of 20 finance ministers and central banks concluded weekend talks in Paris and set Oct. 23 as a deadline for a plan to avoid a Greek default, bolster banks and curb contagion. U.S. retail sales rose more than forecast in September, the Commerce Department said Oct. 14. China may say tomorrow its economy grew more than 9 percent last quarter.
“It does look as if that extremely pessimistic view that the world was heading into recession, if not depression, is now changing and the overall investment view is what we’re looking at is a low-growth environment,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty Ltd. in Sydney. “Confirmation of the growth story in China will be important.”
Crude for November delivery gained as much as 91 cents to $87.71 a barrel in electronic trading on the New York Mercantile Exchange and was at $87.33 at 11:40 a.m. Sydney time. The contract settled at $86.80 on Oct. 14, the highest close since Sept. 20. Prices are down 4.3 percent this year.
Brent oil for December settlement climbed 45 cents, or 0.4 percent, to $112.68 a barrel on the London-based ICE Futures Europe exchange. Front-month futures rose 7.8 percent last week.
Libyan Output
Libya’s Arabian Gulf Oil Co. will pump crude at its full capacity of about 425,000 barrels a day by February after it resumes production at some fields and boosts output at others, Yousef Gherryo, a marketing manager at the company, said yesterday in Benghazi.
Fighting in Libya reduced the availability of light, sweet crude, or oil with low density and sulfur content. The country’s output fell to 45,000 barrels a day in August, according to Bloomberg estimates. The North African nation pumped 100,000 barrels a day last month.
China’s gross domestic product increased 9.3 percent in the third quarter from a year earlier, according to the median estimate of 22 economists in a Bloomberg News survey. That would be the ninth straight quarter of expansion above 9 percent and follow a 9.5 percent gain in the previous three months in China, the second biggest crude-consuming nation behind the U.S.
Hedge Fund Bets
Retail sales in the U.S. advanced 1.1 percent in September, the most since February, according to the Commerce Department in Washington. The median forecast of 85 economists surveyed by Bloomberg called for a 0.7 percent rise in purchases last month.
Hedge funds raised bullish oil bets for the first time in a month, boosting them 7.8 percent in the week ended Oct. 11, according to the Commodity Futures Trading Commission’s Commitments of Traders report on Oct. 14. Net-long positions betting on rising prices in West Texas Intermediate oil held by hedge funds, commodity pools and commodity-trading advisers, in futures and options combined increased 11,389 to 157,693.
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 in Singapore at akwiatkowsk2@bloomberg.net
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