West Texas Intermediate declined for a second day before a report forecast to show crude stockpiles increased last week in the U.S., the world’s biggest consumer of the commodity.
Futures declined as much as 1.3 percent in New York. U.S. crude inventories probably rose by 550,000 barrels to 391.8 million last week, and U.S. gasoline supplies by 500,000 barrels to 219.3 million, according to a Bloomberg News survey before a report tomorrow from the Energy Information Administration. The Organization of Petroleum Exporting Countries raised crude output in May to the highest level in six months while keeping its demand forecast for 2013 unchanged.
“Fundamentals are still skewed towards oversupply, though there are some minor clouds on the horizon,” Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark.
WTI for July delivery fell by as much as $1.27 to $94.50 a barrel and was at $94.62 in electronic trading on the New York Mercantile Exchange as of 1:08 p.m. London time. The volume of all futures traded was 34 percent below the 100-day average. The contract settled at $95.77 a barrel yesterday, the lowest close since June 6.
Brent for July settlement decreased $1.43 to $102.52 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to WTI shrank to as little as $7.74 a barrel today, the narrowest gap since May 22.
Distillate inventories, a category that includes heating oil and diesel, probably increased by 900,000 barrels to 124.2 million, according to Bloomberg’s survey of estimates for the EIA data survey.
Refinery utilization rates in the U.S. climbed 0.3 percentage points to 88.7 percent, the highest since the seven days ended Jan. 4, the survey of analysts shows. The Memorial Day holiday on May 27 marks the start of the nation’s peak driving period, and plants typically boost output this time of year to meet summer demand for motor fuel.
The industry-funded American Petroleum Institute is scheduled to release separate stockpile data today. The API collects the information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, the Energy Department’s statistical arm, for its weekly survey.
Global resources of oil and natural gas from shale formations are greater than previously estimated, the EIA said yesterday in an assessment. Shale gas estimates increased by 10 percent from 2011 to 7,299 trillion cubic feet. Resources of tight oil, which wasn’t assessed in 2011, may be 345 billion barrels, the EIA said in the report.
OPEC increased production by 106,000 barrels a day to 30.57 million a day last month, led by gains in Saudi Arabia, the group said today in its monthly market report, citing secondary sources. Global oil demand will increase by 780,000 barrels a day, or 0.9 percent, this year to 89.7 million a day, in line with estimates in the previous report.
The International Energy Agency, an adviser to oil-consuming nations, will publish its monthly estimates of supply and demand tomorrow.