West Texas Intermediate swung between gains and losses before government data forecast to show U.S. crude inventories fell to a six-month low. London-traded Brent slid for a fourth day.
Futures fluctuated after declining for three days in New York. Stockpiles declined by 1.5 million barrels to 363.1 million last week, a Bloomberg News survey showed before the report from the Energy Information Administration. That would be the fifth drop in six weeks. Prices advanced earlier today after a report showed German industrial production rose in June, adding to signs that growth in Europe’s largest economy accelerated in the second quarter.
“Stockpile withdrawals are normal for this time of year,” said Hans van Cleef, an energy economist at ABN Amro Bank in Amsterdam. “Draws in the past few weeks have supported prices somewhat, but from a historical point of view we’re at relatively high levels, meaning there shouldn’t be any panic.”
WTI for September delivery fell 14 cents to $105.16 a barrel in electronic trading on the New York Mercantile Exchange as of 1:18 p.m. London time. The volume of all futures traded was 16 percent below the 100-day average. Futures are up about 14 percent in 2013.
Brent for September settlement dropped 67 cents to $107.51 a barrel on the ICE Futures Europe exchange. The European benchmark grade was at a premium of $2.35 to WTI, narrowing for the first time in four days.
German industrial output increased 2.4 percent from May, when it dropped a revised 0.8 percent, the Economy Ministry in Berlin said today. Economists forecast a gain of 0.3 percent, according to the median of 41 estimates in a Bloomberg News survey. Production climbed 2 percent from a year earlier when adjusted for working days.
WTI surged 8.8 percent in July, the biggest monthly gain since August 2012, on concern that political turmoil in Egypt may disrupt oil supplies from the Middle East. U.S. crude inventories also shrank in the four weeks through July 19 to 364.2 million barrels, the lowest level since January, according to the EIA, the Energy Department’s statistical unit.
Investors have been reacting to “the EIA numbers for the last three or four weeks because of this substantial draw down that we’ve seen,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “We will be looking forward to less of a draw down and a hint of a more negative impact on crude prices.”
Crude supplies fell 3.7 million barrels, the industry-funded American Petroleum Institute said yesterday, according to a person familiar with the data. The industry group in Washington collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA for its weekly survey.
The U.S. accounted for about 20 percent of global oil consumption last year, compared with 11 percent for China, the second-largest user, according to International Energy Agency data. Motor-fuel demand typically rises during the peak vacation season from May to early September.
Gasoline inventories probably fell by 500,000 barrels in the week ended Aug. 2, according to the median estimate of 11 analysts surveyed by Bloomberg. Supplies dropped by 1 million, said the person familiar with the API data, who asked not to be identified because the report wasn’t publicly distributed.
WTI may rebound after reaching technical support within an uptrend channel going back more than six weeks, according to data compiled by Bloomberg. Futures yesterday traded near the bottom of this channel at about $104.51 a barrel. The channel’s lower limit is about $104.90 today. Buy orders tend to be clustered around chart-support levels.
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