West Texas Intermediate oil fell, trimming its ninth weekly gain in 10 weeks. Open interest for the U.S. benchmark grade rose to a record while a report signaled OPEC will cut crude shipments this month.
WTI fell as much 0.7 percent in New York, paring its advance this week to 1.2 percent. Prices gained 0.3 percent yesterday as the number of contracts outstanding rose to the highest level since the futures began trading on the New York Mercantile Exchange in March 1983. OPEC will cut exports by 0.9 percent this month, according to a tanker tracker. Data on U.S. industrial production later today is forecast to show a third-straight month of expansion.
“Fundamentals are acceptably balanced for now,” said Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark.
Crude for March delivery declined as much as 70 cents to $96.61 a barrel in electronic trading in New York and was at $96.83 at 12:52 p.m. London time. The volume of all futures traded was 32 percent above the 100-day average. Prices are 5.5 percent higher this year.
Brent for April settlement fell 38 cents to $117.62 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 25 percent below the 100-day average. The European benchmark grade was at a premium of $20.19 to WTI futures for the same month. The difference was $20.10 yesterday, the narrowest since Feb. 5.
The number of WTI contracts outstanding on Feb. 13 climbed to 1,665,014, Chris Grams, a Chicago-based spokesman for Nymex-owner CME Group Inc. said yesterday. That surpassed the previous high of 1,664,400 on May 12, 2011, when prices dropped on the death of Osama Bin Laden.
Open interest for Brent set a record of 1,547,943 contracts on Feb. 8. The “path of least resistance” for Brent is higher, Michael Wittner, head of oil-market research at Societe Generale SA in New York, said in a report e-mailed today.
Prices are nearing levels that may prompt lawmakers in the U.S. and Europe to raise the possibility of releasing stockpiles from emergency reserves, according to Olivier Jakob, managing director of Zug, Switzerland-based consultant Petromatrix GmbH.
“We are definitely getting back to the price levels where politicians will start to be under increasing pressure to do something,” Jakob said in an e-mailed report.
The Organization of Petroleum Exporting Countries will ship 23.51 million barrels a day of crude in the four weeks to March 2, down 220,000 from 23.73 million in the previous period, Oil Movements said in a report yesterday. The decline shows “restraint on the supply side” rather than solely a seasonal drop in demand, Roy Mason, the company’s founder, said by phone from Halifax, England.
WTI may decline in coming days as futures approach a “double-top” formation on the daily technical chart, according to data compiled by Bloomberg. Crude halted advances near $98 a barrel on Jan. 31 and Feb. 13, creating two peaks separated by a trough around $95. The lower price signals an area where buy orders may be clustered, and losses tend to accelerate with a breach of the double-top’s support level.
Futures may decline in New York next week on an increase in U.S. crude supplies as refineries cut operating rates to perform maintenance, according to a Bloomberg survey of 40 analysts and traders. Nineteen respondents, or 48 percent, forecast crude will decline through Feb. 22. Thirteen, or 33 percent, predicted an increase and eight forecast little change.