West Texas Intermediate crude rose for a second day following speculation a U.S. government report will show distillate inventories fell amid colder weather in the country, the world’s biggest oil consumer.
Futures climbed as much as 1.1 percent in New York. Distillate supplies, including heating oil and diesel, probably shrank by 2.5 million barrels to 113.7 million last week, according to a Bloomberg News survey before data from the Energy Information Administration today. An industry report yesterday showed stockpiles dropped 1.46 million. A second winter storm this week is moving into the U.S. Northeast. Brent crude’s premium to WTI dropped below $8 a barrel.
“The U.S. winter is keeping levels high because of the increase in demand,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by phone. “There are still some very chilly places. Once we get the winter behind us I’m looking for prices to drift lower as milder weather approaches.”
WTI for March delivery increased as much as $1.07 to $98.26 a barrel in electronic trading on the New York Mercantile Exchange and was at $97.95 as of 1:50 p.m. London time. The contract gained 0.8 percent to $97.19 yesterday, halting a two-day loss. The volume of all futures traded was about 16 percent below the 100-day average.