WTI Crude Falls Second Day on U.S. Supplies While Brent Advances

West Texas Intermediate fell, extending a second monthly loss, as an increase in U.S. crude stockpiles signaled ebbing demand in the world’s biggest oil consumer.

Futures slid as much as 1.1 percent in New York after the industry-funded American Petroleum Institute said inventories rose last week by 5.9 million barrels. A separate report to be issued today by the U.S. Energy Information Administration is expected to show supplies climbed by 2.4 million barrels to 382.2 million, the highest level in four months, according to a Bloomberg News survey of analysts. Brent gained amid output losses in Libya, holder of Africa’s largest reserves.

“We’re having a demand slowdown while refinery runs are lower due to maintenance in the U.S., and hence the supply-demand balance is in surplus,” said Hakan Kocayusufpasaoglu, chief investment officer at Archbridge Capital AG, a Zug, Switzerland-based hedge fund. “Supply figures in the U.S. are going to be overwhelmingly strong for the foreseeable future.”

WTI for December delivery declined as much as $1.10 to $97.10 a barrel in electronic trading on the New York Mercantile Exchange. It was at $97.23 at 12:45 p.m. London time. The volume of all futures traded was about 2 percent greater than the 100-day average. Prices are down 5 percent in October, after losing 4.9 percent last month.

Brent for December settlement rose as much as 63 cents, or 0.6 percent, to $109.64 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $11.87 to WTI, from $10.81 yesterday.

Fuel Supplies

Libya was unable to restart its 350,000 barrel-a-day Sharara field as intended, Moftah Alamin, a spokesman for Tuareg protesters, said by phone yesterday. Minority Tuareg nomads pressing for official recognition of their language and greater political rights have halted flows from the oil field, one of Libya’s biggest.

Production fell nationwide to between 250,000 barrels and 300,000 barrels a day from more than 600,000 on Oct. 21, Mohamed El Elharari, a spokesman for Tripoli-based National Oil Corp., said in a phone interview on Oct. 28. Eni SpA, Italy’s biggest oil company, said in an earnings statement today that its third-quarter profit fell 29 percent partly because turmoil in Libya cut output.

U.S. crude stockpiles have gained for the past five weeks, the API data show. The country will account for about 21 percent of global oil demand this year, almost double the estimate for China, the second-largest consumer, according to forecasts from the International Energy Agency in Paris.

Refined Products

Gasoline inventories increased by 740,000 barrels last week, the API said. The EIA, the Energy Department’s statistical unit, is expected to report a drop of 200,000 barrels, according to the median estimate of 11 analysts surveyed by Bloomberg. Distillate inventories, including heating oil and diesel, declined by 2.7 million barrels, compared with a projected 1 million decrease.

The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, which is scheduled to release its report at 10:30 a.m. in Washington.

Economists expect the Federal Reserve will maintain its $85 billion in monthly bond purchases at a meeting ending today. The Fed will decide to keep purchases of mortgage-backed securities at $40 billion and Treasury buying at $45 billion, according to the survey of economists.

WTI is falling after failing to breach technical resistance along the 200-day moving average for a second day yesterday, according to data compiled by Bloomberg. This indicator is at about $97.28 a barrel today. Sell orders tend to be clustered around chart-resistance levels.

“We’re seeing a picture of weakness,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. “The failure of WTI to break through $98.50 suggests that we have further downside.”

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 on sev@bloomberg.net

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