WTI trades near 3-month high on supplies as Brent gains

West Texas Intermediate traded near the highest price in three months amid speculation that crude inventories fell for a second week in the US, the world’s biggest oil consumer. Brent rose in London.

Crude stockpiles probably dropped by 2 million barrels last week to 387.5 million, a Bloomberg News survey shows before Energy Information Administration data.

OPEC nations representing 94 percent of the group’s output said they’re at ease with global supply and demand before a meeting in Vienna to decide on a collective production limit.

“At the same time as this reduction at Cushing is happening as we enter a time of year where the price tend to go higher and speculative traders are well aware of this hence the almost record speculative long in the market,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by e-mail. “These will only be scaled back dramatically should we move back below $100.”

WTI for July delivery was at $104.65 a barrel in electronic trading on the New York Mercantile Exchange, up 30 cents, at 9:19 a.m. London time. The contract settled at $104.41 on June 9, the highest close since March 3. The volume of all futures traded was about 39 percent below the 100-day average. Prices have increased 6.4 percent this year.

Brent for July settlement was up 34 cents at $109.86 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $5.21 to WTI. The spread narrowed for a third day yesterday to close at $5.17.

Crude stockpiles expanded by 1.5 million barrels in the week ended June 6, the industry-funded American Petroleum Institute reported Tuesday, according to TradeTheNews.com, a newswire. Supplies were at 399.4 million through April 25, the most since the Energy Department’s statistical arm started publishing weekly data in 1982.

“Oil has been boosted by an improved growth outlook in the U.S., but it’s being contained by high supply as we start to work into the driving season,” said Ric Spooner, a chief strategist at CMC Markets in Sydney who predicts investors may sell West Texas contracts if prices rise to about $105 a barrel. “The inventory figures tonight may tell the story on how the market will handle this.”

Gasoline inventories shrank by 440,000 barrels, said the API, which collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. In China, the world’s second-largest oil consumer is hoarding crude at the fastest pace in at least a decade, shielding itself from supply disruptions. Its oil imports are helping drive prices higher, according to Barclays Plc, Citigroup Inc. and Nomura Holdings Inc.

Oil ministers from Angola, Ecuador, Kuwait and Venezuela said they anticipated that the Organisation of Petroleum Exporting Countries will maintain its quota at 30 million barrels a day.

Saudi Arabia, Libya, Nigeria and United Arab Emirates said supply and demand are well-matched. Iraq’s minister said there were indications the limit would be retained, while his Iranian counterpart also expected no change.

The 10 nations accounted for about 28.2 million barrels a day of output in May, data compiled by Bloomberg show.