Oil Advances, Capping Eighth Straight Month of Gains, on Consumer Spending
Baku, April 30 (AZERTAC). Oil rose, capping an unprecedented eighth straight month of gains, as better-than-expected consumer spending signaled fuel demand may climb.
Futures reached a 31-month high after purchases increased in March as Americans spent more on food and fuel, according to a Commerce Department report. Equities advanced and the dollar weakened against other major currencies, boosting the appeal of commodities as an alternative investment.
“We’re getting a little liftoff off of the economic releases and also from the equities market,” said Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois-based consulting company.
Crude for June delivery rose $1.07, or 1 percent, to $113.93 a barrel, the highest settlement since Sept. 22, 2008, on the New York Mercantile Exchange. Futures gained 6.8 percent in April and have advanced each month since August, the longest streak of increases since trading began in 1983. Prices climbed 1.5 percent this week and 34 percent in the past year.
Brent for June settlement advanced 87 cents, or 0.7 percent, to $125.89 a barrel on London’s ICE Futures Europe exchange.
Consumer spending in the U.S. rose 0.6 percent in March after a revised 0.9 percent gain the prior month that was higher than previously estimated, Commerce Department figures showed today in Washington. The increase compared with a 0.5 percent median estimate of economists surveyed by Bloomberg News.
Oil demand in the U.S., the world’s biggest oil-consuming country, is forecast to climb 1.1 percent this year to 19.4 million barrels a day, according to the latest forecast from the Energy Information Administration, the statistical arm of the U.S. Energy Department.
The Organization of Petroleum Exporting Countries’ crude output fell to a 22-month low in April as increases from Saudi Arabia failed to make up for declines in Angola and Libya, a Bloomberg News survey showed.
Production fell 92,000 barrels, or 0.3 percent, to an average 28.43 million barrels a day, the lowest level since June 2009, according to the survey of oil companies, producers and analysts. Daily output by the 11 members with quotas, all except Iraq, decreased 117,000 barrels to 25.82 million, 975,000 above their target.
Business activity in the U.S. grew less than forecast in April, at a pace that’s consistent with steady growth in the world’s largest economy. The Institute for Supply Management- Chicago Inc.’s business barometer dropped to 67.6 from March’s 70.6 level. Figures greater than 50 signal expansion, and the median forecast in a Bloomberg News survey of economists called for a decline to 68.2.
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