Brent crude rebounded from its lowest closing level in 14 months amid speculation that losses have been excessive amid risks to Middle Eastern supply. West Texas Intermediate was steady before U.S. inventory data.
Brent futures advanced as much as 0.8 percent in London, having lost 5.2 percent in the past month. Iraqi security forces stepped up attacks against Islamic State militants after ousting fighters from the country’s largest dam with U.S. air support. Crude stockpiles in the U.S. probably dropped by 1.75 million barrels while gasoline and distillate supplies shrank for a third week, a Bloomberg News survey shows before an Energy Information Administration report.
“It would take extraordinary circumstances to drive prices lower on a sustained basis,” David Wech, an analyst at consultants JBC Energy GmbH in Vienna, said in a report. “We thus see prices slowly recovering over the coming months to levels back above $105.”
Brent for October settlement climbed as much as 81 cents to $102.37 a barrel on the London-based ICE Futures Europe exchange and traded for $101.87 at 1:24 p.m. local time. The volume of all futures traded was about 29 percent above the 100-day average for the time of day. Brent settled at $101.56 yesterday, the weakest since June 25, 2013. It reached a premium of $9.13 to WTI, the most on an intraday basis since June 19.
WTI for October delivery, the U.S. benchmark’s most active contract today, was at $93.14 a barrel in electronic trading on the New York Mercantile Exchange, up 28 cents. The September contract, which expires today, rose as much as $1.77 to $96.25. Front-month prices have declined 3.2 percent this year.