West Texas Intermediate fell for a second day, trimming its fourth annual increase in five years, before a government report that may show fuel inventories grew.
Prices slid after reaching $100 for the first time in two months Dec. 27. Supplies of gasoline and distillate, including gasoline and diesel, rose by 2.5 million barrels last week, the Energy Information Administration may say on Jan. 3, according to a Bloomberg survey. Crude stockpiles are near a record high for this time of the year.
“A lot of crude has been refined but not consumed,” said Bill Baruch, a senior market strategist at Iitrader.com in Chicago. “It helped build product inventories. The market has a bearish bias on it after last week’s rally.”
WTI for February delivery dropped $1.02, or 1 percent, to $98.27 a barrel at 9:05 a.m. on the New York Mercantile Exchange. Trading was less than half the 100-day average for the time of day. Prices are down 4 percent in the fourth quarter, up 6 percent in December and up 7 percent in 2013.
Brent for February settlement declined 65 cents, or 0.6 percent, to $110.56 a barrel on the London-based ICE Futures Europe exchange. Volume was 53 percent below the 100-day average. The grade is up 0.8 percent this month, up 2 percent this quarter and down 0.5 percent for 2013. The European crude was at a premium of $12.29 to WTI, compared with $11.92 yesterday.
Gasoline stockpiles probably rose 1.5 million barrels to 221.4 million last week, the survey showed. An increase of that size would leave supplies at the highest level since Aug. 9. Inventories of distillate fuel advanced 1 million barrels to 115.1 million.
The refinery utilization rate was probably unchanged at 92.7 percent of capacity, the highest level since July 12, according to the survey. The increasing operating rate has boosted production of gasoline to 9.72 million barrels a day in the week ended Dec. 20, the highest level in EIA data going back to 1982.
Crude inventories decreased by 2.9 million barrels to 364.7 million in the week ended Dec. 27, according to the survey. Supplies were at 367.6 million the prior week, the second-highest level for mid-December in more than 30 years of data. They reached a seasonal record last year.
Oil stockpiles have fallen every December since 2005. Companies in Gulf Coast states usually delay imports and minimize supplies at the end of the year to reduce local taxes.
Brent dropped as Libya’s state-run National Oil Corp. said the Messla field has restored output to 25,000 barrels a day.
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