West Texas Intermediate fell from the highest level in a week before U.S. government data forecast to show crude inventories rose to the most in four months in the world’s biggest oil consumer.
Futures dropped as much as 0.8 percent in New York, declining for the first time in four days. U.S. crude stockpiles climbed for a sixth week, according to a Bloomberg News survey before a report from the Energy Information Administration tomorrow. Goldman Sachs Group Inc. cut its 2013 estimate for production from the Organization of Petroleum Exporting Countries, citing supply constraints in Libya.
“Yet another inventory increase is expected,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “The reasons for the WTI weakness and increasing inventories include low refinery utilization due to maintenance and yet another strong increase in shale oil production.”
WTI for December delivery slid as much as 82 cents to $97.86 a barrel in electronic trading on the New York Mercantile Exchange and was at $98.14 at 12:42 p.m. London time. The contract advanced 0.9 percent to $98.68 yesterday, the highest close since Oct. 21. The volume of all futures traded was about 50 percent less than the 100-day average. Prices are 4.1 percent lower so far in October, poised for a second monthly loss.
Brent for December settlement was down 60 cents at $109.01 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $10.87 to WTI, compared with $10.93 yesterday.
Brent rallied 2.5 percent yesterday, the most since Oct. 10, as Libya’s crude production was cut by half amid protests. Output from the country, which holds Africa’s largest oil reserves, fell last month to the lowest among OPEC’s 12 members, according to data compiled by Bloomberg.
Production nationwide dropped to about 250,000 to 300,000 barrels a day as Tuareg nomads seeking greater political recognition halted crude flows from the Sharara field, the state-run National Oil Corp. said yesterday. Oil Minister Abdulbari Al-Arusi visited the field late yesterday, pledging to establish a refinery and oil company in the local region, the Libya News Agency reported. He was unable to reach an accord with protesters, according to a statement on NOC’s website.
Goldman reduced its projection for OPEC supply by 190,000 barrels a day and maintained its Brent prediction at an average of $110 a barrel for the “near-term.” Libyan output will be constrained at about 650,000 barrels a day through the end of the year, according to Jeffrey Currie, the head of commodity research in New York.
WTI capped its biggest weekly decline in more than a month on Oct. 25 amid rising U.S. stockpiles. The country will account for about 21 percent of global oil demand this year, almost double the estimate for China, the second-biggest consumer, according to forecasts from the International Energy Agency.
Crude inventories are projected to have gained by 2.7 million barrels last week to 382.5 million, the highest level since June, according to the median estimate of eight analysts surveyed by Bloomberg.
Gasoline stockpiles probably shrank by 550,000 barrels last week, the survey shows. Distillates, including heating oil and diesel, are expected to have decreased by 950,000 barrels.
The American Petroleum Institute in Washington is scheduled to release separate inventory data later today. The industry group collects supply 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 unit.
WTI’s advance is stalling as futures approach technical resistance along the 200-day moving average, at $98.70 a barrel today, according to data compiled by Bloomberg. Sell orders tend to be clustered around chart-resistance levels.