Oil Heads for Third Quarterly Gain as Libya Disruptions Counter U.S. Glut - Bloomberg

Oil rose, heading for a third quarterly gain in New York, as concern the Libyan conflict will prolong production cuts countered signs of rising supplies in the U.S., the world’s largest crude consumer.

Prices advanced as much as 0.5 percent today after troops loyal to Libyan leader Muammar Qaddafi forced rebels to retreat as the U.S. and U.K. said they would consider arming opposition forces. Crude stockpiles climbed to a record last week at the delivery point for U.S. futures and fuel consumption fell, according to an Energy Department report yesterday.

“Investors are torn between the inventory levels in the U.S. and event risk in the Middle East,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. “Inventory levels are continuing to build and demand continues to fall, which suggest to me that the market has ample supply.”