“Oil advanced to the highest level in four months in New York as a surprise drop in U.S. crude inventories countered concern that the global economic recovery may falter and curb fuel demand.
West Texas Intermediate advanced as much as 0.7 percent to $94.87 a barrel, its highest intraday price since Sept. 19. WTI’s discount to Brent futures narrowed to less than $15 a barrel for the first time since July after the start of an expanded pipeline that is set to pare a glut in the U.S. Midwest. Crude supplies slid 951,000 barrels last week, Energy Department data showed. They were forecast to increase by 2.2 million, according to a Bloomberg survey.
“We may see oil demand picking up in the U.S. and this could support prices,” said Gerrit Zambo, an oil trader at Bayerische Landesbank in Munich, who predicts Brent may rise as high as $120 a barrel this quarter. “But the supply situation is comfortable.”
WTI for February delivery was at $94.76 a barrel, up 52 cents, in electronic trading on the New York Mercantile Exchange as of 12:19 p.m. London time. The contract climbed 96 cents to $94.24 yesterday, the highest close since Sept. 18.
Brent for March settlement on the London-based ICE Futures Europe exchange gained 64 cents to $110.32 a barrel. The European benchmark’s premium to WTI earlier narrowed to $14.98, the smallest gap July 25.
