WTI Oil Set for First Monthly Drop Since October as Supply Rises

West Texas Intermediate was poised for its first monthly decline since October. U.S. crude stockpiles rose less than forecast, and fuel demand increased in the world’s biggest oil consumer.

Futures dropped as much as 0.4 percent, and have lost 5.2 percent this month, the first February since 2006 that WTI has fallen. Crude supplies climbed 1.1 million barrels last week, data from the Energy Department showed, more than the 2.5 million increase forecast in a Bloomberg survey. U.S. fuel consumption averaged 18.5 million barrels a day over the past four weeks, up 2 percent from 2012, according to the report.

“The EIA delivered a mixed set of U.S. fuel inventory numbers,” said Andrey Kryuchenkov, an analyst at VTB Capital in London who predicts that WTI will trade from $90 to $94.70 a barrel next month. “We are in the refinery maintenance season, when demand slackens.”

WTI for April delivery was down 11 cents at $92.65 a barrel in electronic trading on the New York Mercantile Exchange at 12:47 a.m. in London. The volume of all futures traded was 29 percent below the 100-day average.

Brent for April settlement on the London-based ICE Futures Europe exchange advanced 35 cents to $112.22 a barrel. Volumes were about 45 percent of the 100-day average. The European benchmark grade was at a premium of $19.57 to WTI futures, compared with $19.11 yesterday.

Fuel Supplies

U.S. gasoline stockpiles dropped 1.9 million barrels last week, the EIA report showed. They were projected to decline by 1 million, according to the median estimate of 10 analysts surveyed by Bloomberg. Distillate inventories, including heating oil and diesel, increased 557,000 barrels, the data showed. Supplies were expected to decrease by 1.55 million.

Iran hailed a positive “turning point” after talks about its nuclear program with Western officials. The Islamic republic’s negotiator, Saeed Jalili, said yesterday a “more realistic and logical” proposal was made by the U.S. and its five partners at the two-day session in Almaty, Kazakhstan.

In exchange for Iran agreeing to cease its output of 20 percent enriched uranium, the group offered to ease restrictions on its exports of petrochemical products and some additional items, Russian Deputy Foreign Minister Sergei Ryabkov said. Jalili told reporters that technical talks will be held in Istanbul on March 18, and political discussions with international negotiators will resume in Almaty on April 5.

Bollinger Band

WTI has technical support along its lower Bollinger Band, about $92.35 a barrel today, according to data compiled by Bloomberg. Futures yesterday traded below the indicator for a fifth day before settling higher, signaling chart support, where buy orders may be clustered.

Orders for U.S. durable goods excluding transportation equipment, which is often volatile, climbed 1.9 percent in January, exceeding all forecasts of economists surveyed by Bloomberg, Commerce Department data showed. An index of pending home resales rose 4.5 percent to 105.9, the most since April 2010, the National Association of Realtors said.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net Grant Smith in London at gsmith52@bloomberg.net

To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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