Oil Trades Near One-Week High in New York as Saudi Output Climbs

By Ben Sharples - Mar 19, 2012 6:01 AM GMT+0700

Oil traded near the highest price in a week in New York as investors bet that the second-highest Saudi Arabian crude output since at least 1980 signals fuel demand is increasing.

Futures were little changed after climbing the most in more than three weeks on March 16. Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, pumped 9.87 million barrels a day in January, according to data submitted by the government to the Joint Organization Data Initiative. Reports this week may show the economy strengthening in the U.S., the world’s biggest crude consumer.

Oil for April delivery was at $107.36 a barrel, up 30 cents, in electronic trading on the New York Mercantile Exchange at 9:54 a.m. Sydney time. The contract, which expires tomorrow, climbed 1.9 percent to $107.06 a barrel on March 16, the highest close since March 9. The more active May future rose 31 cents to $107.89 a barrel today. Prices have advanced 8.6 percent this year.

Brent oil for May settlement was at $125.95 a barrel, up 14 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $18.06 to New York futures for the same month.

Saudi Arabia’s output in January rose 0.6 percent from December and compares with 10.05 million barrels a day in November. The November figure was the largest in at least 31 years, according to the U.S. Energy Department.

Saudi exports climbed 2 percent in January to 7.5 million barrels a day, the JODI data show. Shipments by Iran, OPEC’s second biggest producer, increased to 2.3 million barrels a day, the highest since December 2008.

Home purchases in the U.S. probably rose in February to the highest level in almost two years in another sign of stabilization in the real-estate market, according to Bloomberg News surveys of economists before reports this week.

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