March 15 (Bloomberg) -- Oil traded near the lowest price in more than a week after U.S. crude stockpiles rose and Saudi Arabia pledged to make up for any shortage in Iranian shipments.
Futures were little changed after falling 1.2 percent yesterday. Crude inventories at Cushing, Oklahoma, the delivery point for West Texas Intermediate oil, climbed to the highest level in nine months, according to the Energy Department. Saudi Arabia will make up any “perceived or real” shortfall, Oil Minister Ali al-Naimi said in Kuwait. Prices have advanced this year as the U.S. and Europe tighten sanctions against Iran over its nuclear program.
“The market has been trapped between $105 and $108 a barrel for a while now,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty in Sydney. “We’re looking for the trigger to push us out of that range and that inventory figure does speak to the potential for a drop.”
Crude for April delivery was at $105.69 a barrel, up 26 cents, in electronic trading on the New York Mercantile Exchange at 10:32 a.m. Singapore time. The contract yesterday dropped $1.28 to $105.43 a barrel, the lowest close since March 6. Prices are 7 percent higher this year.
Brent oil for April settlement was at $124.68, down 29 cents, on the London-based ICE Futures Europe exchange. The contract expires today. The more active May futures were down 13 cents at $124.45. The European benchmark contract’s premium to New York-traded West Texas Intermediate was at $18.95 compared with $19.54 yesterday, the widest gap since Oct. 24.
U.S. crude supplies nationwide rose 1.8 million barrels last week to 347.5 million barrels, the highest level in six months, the Energy Department said yesterday. They were forecast to gain 1.6 million barrels, according to the median of nine analyst estimates in a Bloomberg News survey. The increase was the seventh in eight weeks.
Gasoline stockpiles fell 1.4 million barrels, the Energy Department report showed. They were forecast to decline by 1 million. Distillate inventories, a category that includes diesel and heating oil, slid 4.7 million barrels, compared with a projected drop of 1.5 million.
Oil markets are balanced and have ample output and refining capacity, Saudi Arabia’s al-Naimi said yesterday at the biennial International Energy Forum. Market volatility is caused by speculation, he told the meeting of producers and consumers. U.S. Energy Secretary Steven Chu said he is “enthusiastic” about Saudi willingness to produce more oil to help offset the effect of economic sanctions on Iran.
EU Sanctions Plan
The European Union is seeking to ban imports of products including petroleum oils and natural gas from Iran and to bar global bank-transfer messaging companies from providing services to entities subject to EU sanctions, according to a draft regulation obtained by Bloomberg.
Iran’s oil exports will probably decline by 50 percent when the sanctions take full effect in July, according to the International Energy Agency. Shipments will fall by at least 800,000 barrels a day, David Fyfe, head of the IEA’s market and industry division, said by phone from Paris, citing discussions with market participants.
The “unreasonable measures” will raise costs for governments pursuing them and bolster Iran’s oil revenue, the Islamic Republic’s oil minister, Rostam Qasemi, said yesterday at the IEF meeting in Kuwait.
Oil may extend its decline in New York after breaching technical support yesterday, according to data compiled by Bloomberg. On the daily chart, futures settled below a symmetrical triangle formation going back almost three weeks. Investors tend to sell contracts on such a so-called downside breakout. The top of the triangle, representing technical resistance, was about $107.70 yesterday.
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