WTI Set for Weekly Decline; IEA Sees Non-OPEC Supply Gain

West Texas Intermediate crude headed for a fourth weekly loss in five. The International Energy Agency forecast that non-OPEC supplies will surge next year by the most since the 1970s.

Futures fell as much as 1.4 percent in New York and are headed for a weekly loss of 2.1 percent. Producers outside the Organization of Petroleum Exporting Countries will increase output by a near-record 1.7 million barrels a day next year to 56.4 million, the IEA said today in its monthly market report. Brent’s premium to WTI climbed to a four-month high as the detention and release of Libya’s prime minister fanned concern the country’s oil exports may face fresh disruptions.

“Prices dropped after the IEA published their monthly forecast,” said Hannes Loacker, an analyst at Raiffeisen Bank International AG (RBI) in Vienna. “If the IEA picture on the supply side is correct, there is a real risk that Brent prices will drop below $100 a barrel during 2014.”

WTI for November delivery slid as much as $1.46 to $101.55 a barrel in electronic trading on the New York Mercantile Exchange and was at $101.76 as of 1:26 p.m. London time. The volume of all futures traded was about 82 percent above the 100-day average.

IEA Report

Brent for November settlement dropped as much as 74 cents to $111.06 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude’s premium to WTI widened to as much as $10.01, the biggest spread since April 26.

The IEA also trimmed its forecast for global oil demand growth in 2014. World fuel consumption will increase by 1.1 million barrels, or 1.2 percent, to 92 million barrels a day in 2014, according to its monthly market report.

WTI gained 1.4 percent yesterday amid optimism the impasse in Washington on raising the U.S. debt ceiling and ending the partial government shutdown will be resolved. House Speaker John Boehner and other Republican leaders met with the president to discuss delaying the lapse in U.S. borrowing authority to Nov. 22 from Oct. 17 without attaching policy conditions. The debt-limit bill could be voted on as early as today.

The U.S. benchmark may advance next week as lawmakers near an agreement, according to a Bloomberg News survey. Fourteen of 33 analysts and traders, or 42 percent, forecast crude will increase through Oct. 18. Eleven respondents, or 33 percent, predicted a decline and eight projected no change.

Libya Abduction

Libya’s Prime Minister Ali Zaidan was freed yesterday hours after being held by the country’s anti-crime unit at a Tripoli hotel. Militia violence, which has plagued the North African nation since the capture and death of former leader Muammar Qaddafi in 2011, has intensified in recent months with groups refusing to heed government calls to disband.

Protests have disrupted oil production and exports from Libya, a member of the OPEC. Output fell to 300,000 barrels a day in September, the least since the same month in 2011, according to a Bloomberg survey of analysts and producers.

OPEC’s production in September dropped to the lowest level in almost two years amid losses in Iraq and Libya, according to the IEA. The group’s 12 members, responsible for 40 percent of global crude supplies, pumped 29.99 million barrels a day last month, the least since October 2011, the agency said in its monthly report today.

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

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

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