Bloomberg Oil Trades Near $84 as Airspace Reopens, Crude Supplies Decline

April 21 (Bloomberg) -- Oil traded near $84 a barrel after rising as European airspace began to reopen, restoring some demand for jet fuel, and an industry report showed U.S. crude stockpiles fell.

Oil climbed yesterday as Paris, Frankfurt and Amsterdam reopened airports shut by ash from a volcanic eruption in Iceland. Futures also advanced after crude oil inventories declined 741,000 barrels, according to the American Petroleum Institute. A U.S. government report today will probably say crude supplies dropped, a Bloomberg analyst survey shows.

“The flights resuming raises expectations that some of that jet fuel demand is going to come back,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York.

Crude oil for June delivery was at $83.93 a barrel, up 8 cents, in electronic trading on the New York Mercantile Exchange at 8:54 a.m. in Sydney. Yesterday, the contract rose 72 cents, or 0.9 percent, to settle at $83.85. May futures, which rose $2 to $83.45, expired at the close of floor trading.

Oil also advanced as U.S. equities rose, snapping a two-day drop for the MSCI World Index, as improving corporate earnings boosted confidence in the global recovery. The Standard & Poor’s 500 Index gained 0.8 percent in New York.

Jet fuel consumption in Europe has fallen by about two- thirds after flights in the region were halted. Deutsche Lufthansa AG, Europe’s second-biggest airline, terminated some oil deliveries.

Crude Supplies

U.S. inventories of crude oil probably declined 750,000 barrels last week from 354 million barrels as imports slowed, according to the median estimate of 19 analysts in a Bloomberg News survey before the Energy Department report. Supplies increased for 10 consecutive weeks to reach a nine-month high of 356.2 million barrels in the period ended April 2. more...