Futures dropped as much as 0.4 percent in London, having lost 2.9 percent this week. Terminals in eastern Libya will resume on Dec. 15 after a four-month halt, Brigadier Idris Bukhamada, head of the country’s Petroleum Facilities Guard, said Dec. 10. West Texas Intermediate may fall in coming days amid speculation the Federal Reserve will taper bond buying as soon as next week, according to a Bloomberg News survey.
“There’s one word to describe the reason for Brent’s loss and that’s Libya,” said Ole Hansen, head of Saxo Bank A/S in Copenhagen. “We’ve the potential of seeing supply from Libya coming back, though obviously that still needs to be confirmed, that is just removing a little” of the support for Brent.
Brent for January settlement, which expires on Dec. 16, dropped 32 cents to $108.35 a barrel as of 1:28 p.m. local time on the London-based ICE Futures Europe exchange. The more-active February contract traded 35 cents lower at $108.03. The European benchmark crude was at a $11.33 premium to WTI, compared with $11.06 yesterday.
WTI for January delivery slid 50 cents to $97 a barrel in after hours electronic trading on the New York Mercantile Exchange. The volume of all futures traded was 27 percent below the 100-day average. Futures have climbed 5.6 percent in 2013 and are set for the fourth annual advance in five years.
Libya’s oil ports of Es Sider and Ras Lanuf, with combined capacity of 600,000 barrels a day, and a third terminal, Zueitina, will restart on Dec. 15, Bukhamada said.
Production from OPEC’s 12 members fell for a fourth month in November to 29.7 million barrels a day, driven by reduced output in Libya, the International Energy Agency said in its monthly report on Dec. 11.
WTI will decrease through Dec. 20, said 16 of 31 analysts and traders, or 52 percent, in a separate Bloomberg survey. Seven respondents predicted an advance and eight projected no change. Last week, 60 percent forecast prices will drop.
U.S. retail sales climbed 0.7 percent last month, the most since June, according to Commerce Department data that signaled consumer spending is emerging from a third-quarter lull.
The Fed may begin cutting stimulus at its Dec. 17 to Dec. 18 meeting, according to 34 percent of economists surveyed by Bloomberg on Dec. 6. Fed officials are monitoring progress in the labor market as they debate when to pull back on $85 billion a month in bond purchases, known as quantitative easing.
“Tapering of stimulus is seen as a hawkish maneuver,” said Jonathan Barratt, chief executive officer of Barratt’s Bulletin in Sydney, said by phone today. “As markets look for the terminal point, tapering may damage the outlook for demand. Bulls and bears are at evens based on existing fundamentals.”
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