Oil rose for a second day in New
York before European leaders meet this week to agree on a
blueprint to tackle the region’s sovereign debt crisis. London-
traded Brent’s premium to U.S. crude widened.
Futures climbed as much as 0.6 percent after earlier
declining 0.5 percent. European leaders yesterday outlined plans
to aid banks while ruling out using the European Central Bank’s
balance sheet to boost the region’s rescue fund. They may agree
to a complete plan at a summit on Oct. 26. Saudi Arabia, the
Organization of Petroleum Exporting Countries’ largest oil
producer, is waiting for a successor to the crown prince after
the death of Sultan bin Abdulaziz Al Saud.
“The market is still riding on optimism,” said Jonathan Barratt, a managing director of Commodity Broking Services Pty
in Sydney. “Crude did come off a little bit and it might have
something to do with a little bit of nervousness in terms of
control on compliance in OPEC after the Sultan passed away.”
Oil for December delivery was at $87.66 a barrel, up 26
cents, in electronic trading on the New York Mercantile Exchange
at 11:53 a.m. Sydney time. The contract rose 1.6 percent to
$87.40 on Oct. 21, the highest close since Oct. 18. Prices are
down 4.1 percent this year.
Brent crude for December settlement climbed 41 cents, or
0.4 percent, to $109.97 a barrel on the London-based ICE Futures
Europe exchange. The European benchmark contract traded $22.31
higher than New York futures, compared with $22.16 on Oct. 21
and a record settlement of $27.88 on Oct. 14.
Saudi Succession
Hedge funds boosted bullish bets on oil by the most in five
weeks, a report on Oct. 21 showed. Money managers added to
wagers on rising U.S. prices by 8.7 percent in the week ended
Oct. 18, according to the Commodity Futures Trading Commission’s
Commitments of Traders report.
Sultan’s death on Oct. 22 has set in motion “a challenging
moment for Saudi Arabia,” Tarik Yousef, a fellow at the
Washington-based Brookings Institute, said in an interview in
Jordan. “Observers are anxious about a political vacuum.”
The nation’s King Abdullah, who is 87, left a hospital in
Riyadh last week after undergoing surgery to relieve back pain.
He traveled to the U.S. in November for three months of medical
care.
Saudi Arabia raised oil supply this year after exports from
Libya collapsed during the uprising against Muammar Qaddafi. It
boosted production after failing to get OPEC to adopt a 1.5
million-barrels-a-day output increase at a meeting in June.
The euro slipped today on concern that the anti-crisis
package will be less than the sum of its parts. The European
Union accounted for about 16 percent of the world’s oil
consumption last year, according to BP Plc’s annual Statistical
Review of World Energy.
To contact the reporter on this story:
Ben Sharples in Melbourne at
bsharples@bloomberg.net
To contact the editor responsible for this story:
Alexander Kwiatkowski in Singapore at
akwiatkowsk2@bloomberg.net