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  • September 28th, 2012

Crude Oil Set for Quarterly Gain as U.S. Spending Increases

Oil headed for its biggest quarterly gain this year as personal spending in the U.S. rose in line with forecasts, signaling an economic recovery that may boost fuel demand.

Futures were little changed after climbing 2.1 percent yesterday, the most in eight weeks. U.S. household purchases climbed 0.5 percent last month, up from 0.4 percent in July, according to Commerce Department data. Oil jumped yesterday as Spain pledged to cut its deficit to ease Europe’s debt crisis. Prices erased a 0.9 percent gain today as the US dollar rebounded against the euro.

“Things are looking more positive with Spain, but we are not out of the woods yet,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, who expects Brent crude to average $105 to $110 a barrel in the last quarter of 2012. “I think the rally we are seeing will run out of steam as the fundamental factors don’t stack up.”

Crude for November delivery on the New York Mercantile Exchange traded at $91.68 a barrel, down 17 cents, at 1:40 p.m. BST. The contract earlier gained as much as 86 cents to $92.71 a barrel and climbed $1.87 to $91.85 yesterday. Prices are up 7.9 percent this quarter and down 5 percent in September.

Brent oil for November settlement rose 40 cents to $112.41 a barrel in London. The European benchmark grade’s premium to West Texas Intermediate was at $20.73 a barrel after closing at $20.16 yesterday.

Stockpile Release

The International Energy Agency doesn’t see an immediate need to tap emergency oil stockpiles and views sanctions against Iranian exports as insufficient cause to trigger using strategic reserves, Ulrich Benterbusch, the agency’s director for global energy policy, said today in an interview in Berlin.

The oil market is well supplied and there’s no scarcity, according to the head of the Organization of Petroleum Exporting Countries.

OPEC’s spare production capacity “remains at relatively comfortable levels and total commercial stock levels are healthy,” Abdalla El-Badri said today in a speech in Berlin. “It is clear, the market is currently well supplied. Supply and demand fundamentals point to a stable market. We see no shortages.”

The organization will curb crude shipments into next month as demand from China declines and refiners carry out maintenance, tanker-tracker Oil Movements said yesterday in its weekly e-mailed report. OPEC will export 23.66 million barrels a day in the four weeks to Oct. 13, down 1.2 percent from 23.95 million a month earlier, it said.

U.S. Spending

Household purchases in the U.S. rose 0.5 percent last month, matching estimates and the biggest gain since February, according to data from the Commerce Department issued in Washington today.

Spanish Prime Minister Mariano Rajoy’s government announced its fifth austerity package to shrink the eurozones’s third- biggest budget deficit. The European Union used 16 percent of the world’s oil last year, according to BP Plc (BP/)’s Statistical Review of World Energy. The U.S. accounted for 21 percent.

Royal Dutch Shell Plc (RDSA)’s 400,000 barrel-a-day Pernis plant in the Netherlands is conducting maintenance until November. Supplies on the U.S. East Coast, including New York Harbor, the delivery point for futures contracts, were the lowest since October 2008 last week, Energy Department data show.

Crude may decline in New York next week, according to a survey of analysts. Thirteen of 28 respondents, or 46 percent, forecast crude will decrease through Oct. 5. Ten analysts, or 36 percent, predicted that futures will gain and five said there will be little change in prices.

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