Crude Falls Before Inventory Report Amid U.S. Standoff
West Texas Intermediate crude fell before a government report that may show U.S. stockpiles grew for a third week and as talks to end the government shutdown and lift the debt ceiling remained deadlocked.
Prices dropped as much as 1.1 percent. Crude inventories may have gained 1.55 million barrels last week, a Bloomberg survey showed before an Energy Information Administration report. Republican lawmakers have sought spending cuts and changes in the health-care law in exchange for an agreement to reopen the government and raise the debt limit.
“Everybody is waiting for the EIA report,” said Bill Baruch, a senior market strategist at Iitrader.com in Chicago. “Growth may be handicapped by the government shutdown and there is demand worry. The bears are in control now.”
WTI for November delivery slid $1.13, or 1.1 percent, to $102.36 a barrel at 9:22 a.m. on the New York Mercantile Exchange. The volume of all futures traded was about 44 percent below the 100-day average.
Brent for November settlement fell $1.10, or 1 percent, to $109.06 a barrel on the London-based ICE Futures Europe exchange. Trading was 10 percent below the 100-day average. The European benchmark was at a premium of $6.70 to WTI versus $6.67 yesterday.
U.S. crude inventories rose to 365.3 million in the week ended Oct. 4, the Bloomberg survey showed. The total would be the most since July 12. The survey also showed gasoline stockpiles increased 1.05 million barrels and distillates decreased by 1.15 million.
The American Petroleum Institute said yesterday that crude stockpiles climbed 2.8 million barrels. The API collects supply information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, the Energy Department’s statistical arm, for its weekly survey.
Possible paths out of the partisan impasse in Washington are starting to emerge as the U.S. government enters the ninth day of a partial shutdown, with less than a week before U.S. borrowing authority lapses Oct. 17. Each option is tentative and lawmakers remain far from an agreement amid verbal sparring between President Barack Obama and House Speaker John Boehner.
Obama opened the door to talks with Republicans on topics ranging from health care to entitlement programs if they end the impasse over the U.S. debt ceiling. Boehner insisted on immediate negotiations, rejecting the president’s stance that he’ll talk only after the shutdown ends and the risk of default is pushed back.
The U.S. is the world’s largest oil user, accounting for 21 percent of global consumption last year, according to BP Plc’s Statistical Review of World Energy.
To contact the reporter on this story: Moming Zhou in New York at email@example.com
To contact the editor responsible for this story: Dan Stets at firstname.lastname@example.org