Market and product

Oil traded near the highest levelin three weeks amid speculation China and the U.S. will addstimulus to their economies, sustaining demand for fuel in theworld’s biggest crude users.

Futures were little changed after rising for a fifth dayyesterday, the longest run of gains since July. Chinese Premier Wen Jiabao said the government has more room for fiscal andmonetary policy to support growth. The Federal Open Market Committee starts a two-day meeting today, when it may announcemeasures to stimulate the U.S economy. The nation’s crudestockpiles probably fell 2.9 million barrels last week, aBloomberg survey shows before an Energy Department report.

“The premier’s comments are supportive for the oilmarket,” said Ric Spooner, a chief market analyst at CMCMarkets in Sydney. “With the Fed, the issue is what they do andhow big it’s going to be. Without supply shocks, we are probablyfairly close to the top end of the range for oil.”

Crude for October delivery was at $97.19 a barrel, up 2cents, in electronic trading on the New York Mercantile Exchangeat 2:06 p.m. Singapore time. The contract yesterday rose 0.7percent to $97.17, the highest close since Aug. 22. Prices are1.7 percent lower this year.

Brent oil for October settlement gained 27 cents to $115.67a barrel on the London-based ICE Futures Europe exchange. TheEuropean benchmark grade’s premium to West Texas Intermediatewas at $18.48, from $18.23 yesterday.

‘Ample Strength’

The difference between the world’s two most-traded gradesof oil, which widened to as much as $21.92 last month, isnarrowing as North Sea production rebounds from the lowest levelin five years. Daily exports of the four crude grades comprisingthe Dated Brent benchmark will rise 24 percent in October, thebiggest monthly increase in two years, as maintenance work ends,data compiled by Bloomberg shows.

China has “ample strength” for preemptive fiscal andmonetary measures, Wen said at the World Economic Forumm inTianjin city yesterday. The government is trying to preventgrowth this year from slipping below the 7.5 percent target setin March, which would already be the weakest since 1990.

Fed Chairman Ben S. Bernanke said on Aug. 31 that hewouldn’t rule out more economic stimulus for the U.S. Thecentral bank bought a total of $2.3 trillion in bonds fromDecember 2008 to June 2011 in two rounds of asset purchasesknown as quantitative easing.

“The market is waiting on the outcome of the FOMC meetingand data from the Energy Department,” said David Lennox, ananalyst at Fat Prophets in Sydney.

Slowing Demand

Oil in New York slipped as much as 0.5 percent earliertoday after the industry-funded American Petroleum Institutesaid crude stockpiles rose 221,000 barrels last week. Gasolinesupplies declined 4.16 million barrel and distillate-fuelinventories rose 2.55 million, the API’s weekly report showed.

Supplies of oil are abundant and consumption will slow nextyear, the Organization of Petroleum Exporting Countries saidyesterday. Global demand will rise by an average 800,000 barrelsa day to 89.55 million a day in 2013, OPEC said in its monthlymarket report. Demand is forecast to increase by 900,000 barrelsa day to 88.74 million this year. The group estimates its 12members will need to pump an average of 29.5 million barrels aday next year, or 1.9 million less than current output.

WTI will average $93.67 a barrel during the final threemonths of this year, the Energy Department said in its Short-Term Energy Outlook yesterday. Prices will average $92.63 abarrel next year, the department said.

Oil in New York has technical resistance along the upperBollinger Band on the daily chart, around $99.36 a barrel today,according to data compiled by Bloomberg. Futures have haltedadvances near this indicator since July. Sell orders tend to beclustered near chart-resistance levels.