By Ben Sharples
Oil climbed for a second day in New York on speculation fuel demand will increase after the Federal Reserve renewed its pledge to stimulate growth and U.S. gasoline stockpiles fell to the lowest since August 2009.
Futures rose to a 31-month intraday high today after Federal Reserve Chairman Ben S. Bernanke signaled the Fed will maintain its record monetary stimulus. The Energy Department said gasoline inventories fell 2.51 million barrels to 205.6 million last week, declining for the 10th week. They were projected to drop 1 million barrels, according to analysts surveyed by Bloomberg News.
The Fed “said it would complete its latest $600 billion bond-buying program in June as scheduled and it would keep interest rates low for an extended period, which was positive for commodities,” Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in an e-mailed note today. The Energy Department report “was seen as positive by the market,” he said.
Crude oil for June delivery gained as much as 94 cents, or 0.8 percent, to $113.70 a barrel in electronic trading on the New York Mercantile Exchange, the highest since Sept. 22, 2008. The contract was at $113.54 at 9:29 a.m. Singapore time. Yesterday, it climbed 55 cents, or 0.5 percent, to $112.76. Prices are 37 percent higher than a year earlier.
Brent oil for June settlement increased 66 cents, or 0.5 percent, to $125.79 a barrel on the London-based ICE Futures Europe exchange. Yesterday, it rose 99 cents, or 0.8 percent, to $125.13, the highest close since April 8.
The European crude benchmark traded at a premium of $12.37 a barrel to U.S. futures yesterday. The difference between front-month contracts in London and New York surged to a record $19.54 on Feb. 21. The spread averaged 76 cents last year.
Oil climbed after the Federal Reserve renewed its pledge to stimulate growth with low interest rates and said a pickup in inflation is likely to be temporary. The Fed announcement bolstered equities and sent the dollar lower.
The Energy Department report showed U.S. stockpiles of distillate fuel, a category that includes heating oil and diesel, declined 1.81 million barrels to 146.5 million last week. Crude supplies in the world’s largest oil-consuming nation climbed 6.16 million barrels, the report showed.
Oil has advanced 24 percent in New York this year. Unrest in the Middle East and North Africa has toppled leaders in Egypt and Tunisia and spread to Libya, Algeria, Bahrain, Iran, Oman, Syria and Yemen.
Gasoline for May delivery rose for a sixth day, gaining 3.06 cents to $3.45 a gallon on the New York Mercantile Exchange. The record was $3.571 on July 3, 2008.
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