Oil Trades Near Two-Day Low as Crude Stockpiles Rise; Brent Premium Widens
Oil traded near a two-day low in New York after the biggest monthly drop since May as investors bet rising U.S. crude stockpiles indicate that fuel demand is faltering in the world’s biggest consumer of the commodity.
Futures were little changed after an Energy Information Administration report yesterday showed supplies increased 5.28 million barrels last week to 357.1 million. They were forecast to decline by 500,000 barrels, according to a Bloomberg News survey of analysts. London-traded Brent oil widened its premium to U.S. prices for a third day.
“U.S. crude oil prices fell modestly after the release of the weekly EIA energy report,” James McIntyre, an economist at Commonwealth Bank of Australia, said in a note today. “Crude stockpiles rose by a surprising 5.28 million barrels last week against expectations.”
Crude for October delivery was at $88.78 a barrel, down 3 cents, in electronic trading on the New York Mercantile Exchange at 10:55 a.m. Sydney time. The contract yesterday fell 9 cents to $88.81, the lowest settlement since Aug. 29. Prices dropped 7.2 percent last month and are down 2.9 percent this year.
Brent oil for October settlement was at $114.86 a barrel, up 1 cent, on the London-based ICE Futures Europe exchange. Prices fell 1.6 percent last month. The European benchmark contract was at a premium of $26.10 to U.S. futures, compared with a record close of $26.21 on Aug. 19.
The increase in U.S. crude stockpiles was the largest since the seven days ended April 22. Gasoline inventories fell 2.8 million barrels to 208.6 million, the Energy Department report showed. They were estimated to drop 1.05 million barrels, the Bloomberg survey shows. Total products supplied, a measure of fuel demand, rose 1.7 percent to 19.6 million barrels a day, the first gain in three weeks.
The Organization of Petroleum Exporting Countries’ crude output in August rose to the highest level since November 2008, led by Saudi Arabia, which pumped the most oil since at least 1989, a Bloomberg News survey showed. Production increased 90,000 barrels to average 30.03 million barrels a day, according to the survey of oil companies, producers and analysts.
Tropical Storm Katia is likely to become a hurricane today, according to an advisory by the National Hurricane Center at about 4:40 p.m. New York time yesterday. Katia was about 1,285 miles (2,070 kilometers) east of the Leeward Islands with 70 mph winds and moving west-northwest at 20 mph, the advisory said.
The storm, which will become a hurricane when its winds reach 74 mph, is traveling on a path that will take it to waters northeast of Puerto Rico on Sept. 4, the Miami-based center said.
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