“Oil traded near the highest close in almost three weeks in New York amid speculation the U.S. will add to measures to revive its economy, countering concern that Europe’s bailout plan will falter.
Futures were little changed, paring an earlier decline. U.S. crude inventories probably dropped to the lowest level since March as more than a third of Gulf of Mexico output remained shut 10 days because of Hurricane Isaac, a Bloomberg survey showed. The Federal Reserve starts a two-day meeting tomorrow where it may announce stimulus measures. Goldman Sachs Group Inc. said West Texas Intermediate oil may rise to narrow the gap between the benchmark grade and other regional crudes.
“Prices are likely to break to the upside,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark, who predicts Brent crude will surpass $116 a barrel in the next week. “Oil fundamentals are balanced. A rise in prices would mostly be fueled by more money flooding in from the Fed.”
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