WTI Crude Futures Near Four-Month Low on U.S. Oil Supply

West Texas Intermediate fell to trade near the lowest price in more than four months amid speculation crude inventories increased for a seventh week in the U.S., the world’s biggest oil consumer.

Futures eased 0.2 percent after settling last week at the lowest close since June. Crude stockpiles probably expanded by 2.2 million barrels to 386.1 million last week as production climbed to a 24-year high, according to a Bloomberg News survey of analysts before data from the Energy Information Administration tomorrow. Libya is preparing to resume crude exports at its Hariga terminal in coming days.

“We have Libya on one side, adding some support, although they aim to resume some of the exports over the next week, and at the same time we have pretty weak demand figures, with the market looking ahead to tomorrow, to see what the status is in the U.S. in particular,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by phone.

WTI for December delivery was at $94.40 a barrel in electronic trading on the New York Mercantile Exchange, down 22 cents, at 1:24 p.m. London time. It closed at $94.61 on Nov. 1, the lowest since June 21, and was little changed yesterday. The volume of all WTI futures traded was about 42 percent below the 100-day average.

Brent for December settlement gained 3 cents to $106.26 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $11.86 to WTI, compared with $11.61 yesterday.

Crude Supplies

WTI fell 5.8 percent in October, the biggest monthly decrease in a year, as a surge in U.S. crude production bolstered inventories. Output rose to 7.9 million barrels a day as of Oct. 18, the fastest rate since March 1989, according to the EIA, the Energy Department’s statistical unit.

“What’s happening with fresh U.S. supplies coming onstream seems to have caught the market a little by surprise,” David Lennox, a resource analyst at Fat Prophets in Sydney, said by phone. “We saw WTI react to that with a fairly sharp fall, and now it’s stabilized somewhat.”

Gasoline stockpiles probably declined by 400,000 barrels in the week ended Nov. 1, according to the median estimate of seven analysts surveyed before the EIA’s report tomorrow. That would leave supplies at 213.4 million, the lowest level since November last year. Distillate fuels, including heating oil and diesel, are expected to have dropped by 1.5 million barrels to 121.2 million, the survey shows.

Separately, the industry-funded American Petroleum Institute is scheduled to release its own weekly inventory report later today.

Libya Exports

Market participants are also waiting for the European Central Bank’s monetary policy decision on Nov. 7 and the U.S. monthly jobs data the day after for signals on oil demand, Hansen said.

In Libya, the holder of Africa’s biggest crude reserves, loadings at Hariga may resume next week, according to state-run National Oil Corp. Members of Libya’s Petroleum Facilities Guard have closed the eastern port and three other terminals since July to demand more money and equipment from the government amid allegations of corruption within the oil ministry.

Libya’s daily crude output was about 250,000 barrels on Nov. 3, Mohamed Elharari, a National Oil spokesman, said yesterday. That’s down from 1.3 million barrels in the first half of this year, according to data compiled by Bloomberg.

Shipments of North Sea Gullfaks for December are planned at seven cargoes, unchanged from November’s total, a loading program obtained by Bloomberg News showed. More North Sea programs will be issued through tomorrow.

WTI may rebound as a technical indicator signals further losses probably aren’t sustainable. The 14-day relative strength index is below 30 for a third day, data compiled by Bloomberg show. Futures advanced in April from about $86 a barrel when the RSI was last below that level. Investors typically buy contracts when the market is oversold.

To contact the reporter on this story: Konstantin Rozhnov in London at krozhnov@bloomberg.net

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

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