May 27 (Bloomberg) -- West Texas Intermediate crude fell for a fifth day, the longest run of declines this year, as China signaled it may accept a slower economic growth rate. OPEC is expected to keep its supply target unchanged this week.
Futures slid as much as 1 percent in New York, extending a 2 percent drop last week. China, the world’s second-biggest oil consumer, won’t sacrifice the environment to ensure short-term growth, President Xi Jinping said on May 24. The U.S. Federal Reserve should continue monetary stimulus because the economy still isn’t normal, Nobel Prize-winning economist Joseph Stiglitz said May 25. The Organization of Petroleum Exporting Countries will maintain its output limit when the group meets May 31 in Vienna, according to a Bloomberg News survey.
“We have slowing Chinese growth and demand and plenty of supply coming online in the U.S., so the feeling is that the market is oversupplied,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by telephone today. “There is a bit of risk.”
WTI for July delivery declined 20 cents to $93.95 a barrel at 6:34 p.m. in electronic trading on the New York Mercantile Exchange. Prices are up 0.5 percent in May after a 3.9 percent loss in April. Floor trading is closed on the Nymex for the U.S. Memorial Day holiday. Electronic transactions will be booked with tomorrow’s trades for settlement.
Brent for July settlement fell 2 cents to end the session at $102.62 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $8.97 to WTI futures. The spread closed at $8.49 on May 24, the widest in six days.
OPEC, which supplies about 40 percent of the world’s oil, will need to keep its output target unchanged at 30 million barrels a day to meet increased demand during the northern hemisphere summer, said Sadad al-Husseini, the founder of Husseini Energy, a consultant in Dhahran, Saudi Arabia.
National Commercial Bank, Saudi Arabia’s biggest lender by assets, said the group will need to cut production to maintain oil prices at more than $100 a barrel for the rest of 2013.
OPEC’s 12 members pumped 30.5 million barrels a day in April, according to the group’s monthly oil market report published May 10. Saudi Arabia is the largest exporter.
Stiglitz said it would be premature for the Federal Reserve to reduce monetary stimulus even if there’s little evidence it helped the world’s largest economy.
“Clearly the economy is not back to normal,” the Columbia University professor said in a May 25 interview at the World Economic Forum in Jordan. “To accept this as the new normal would be really wrong.”
WTI has technical support along its middle Bollinger Band on the weekly chart, according to data compiled by Bloomberg. This indicator, at around $92.34 a barrel today, is close to where futures halted declines the past two weeks. Buy orders tend to be clustered near chart-support levels.
Hedge funds raised bullish bets on WTI to the highest level in more than a year with the approach of the U.S. Memorial Day weekend, which marks the start of the summer months when demand for motor fuels typically rises.
Money managers boosted net-long positions, or wagers on higher prices, to 231,794 futures and options combined in the week ended May 21, according to the U.S. Commodity Futures Trading Commission’s Commitments of Traders report on May 24. It was the most since March 2012.