Topic: Oil Rises as Traders Buy Contracts After API Stockpiles Decline
Crude oil rose in New York as traders purchased contracts to close out bets prices would fall after an industry report unexpectedly showed U.S. stockpiles declined last week.
Oil partly retraced yesterday’s 5.1 percent loss as market participants who held short positions bought futures on concerns prices may reverse. The industry-funded American Petroleum Institute said that U.S. supplies declined 2 million barrels to 344.3 million last week. An Energy Department report today is expected to show an increase of 2.75 million barrels.
“The market bounced back after the sell off yesterday,” said Clarence Chu, a trader with options dealer Hudson Capital Energy in Singapore. “If the market is just consolidating then I’m looking to cover my short positions. Right now I’m not so sure the inventories will build because the API number came in as a draw.”
Crude oil for March delivery rose as much as 67 cents, or 1.8 percent, to $38.22 a barrel on the New York Mercantile Exchange. It was at $38.15 a barrel at 3:30 p.m. Singapore time.
Yesterday, crude oil fell $2.01 to $37.55 a barrel in New York, the lowest settlement since Jan. 16. It was the biggest drop since Jan. 27. Oil is down 15 percent this year and has declined 60 percent from a year ago.
Source: http://www.bloomberg.com/apps/news?pid= … ibKdKzBSic