West Texas Intermediate fell from the highest closing price this month amid speculation crude inventories rose to the most since June in the U.S., the world’s biggest oil consumer.
Futures slid as much as 0.9 percent after two days of gains. Crude stockpiles climbed for an eighth week, adding 500,000 barrels in the period ended Nov. 8, according to a Bloomberg News survey before a report from the Energy Information Administration this week. Iran and the United Nations signed their first accord in six years yesterday, giving monitors broader access to nuclear facilities in the Persian Gulf nation. The U.S. will become the largest oil producer by 2015, the International Energy Agency said today.
“If you look at the U.S. market only, you’ll probably have a good surplus,” said Andy Sommer, a senior oil analyst at Axpo Trading AG in Dietikon, Switzerland. “Our assumption is that Iranian crude comes back to the market in the later part of 2014. Not fully back, but a slow, gradual ramp up.”
WTI for December delivery dropped as much as 83 cents to $94.31 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $94.77 as of 12:11 p.m. London time. It advanced 0.6 percent to $95.14 yesterday, the highest close since Oct. 31. The volume of all futures traded was about 34 percent below the 100-day average.
Brent for December settlement rose as much as 59 cents to $106.99 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $12.02 to WTI. The spread was $11.26 yesterday, the widest based on closing prices in four days.
WTI lost 5.8 percent in October, the biggest monthly drop in a year, as a surge in U.S. crude production bolstered inventories. Output expanded to 7.9 million barrels a day as of Oct. 18, the fastest rate since March 1989, according to the EIA, the Energy Department’s statistical unit.
Crude stockpiles probably rose to 385.9 million barrels last week, the highest level since the seven days to June 21, according to the median estimate of nine analysts in the Bloomberg survey. The EIA is scheduled to release its weekly report on Nov. 14 in Washington, a day later than usual because of the Veterans Day holiday yesterday.
Gasoline inventories may have fallen by 500,000 barrels for a fifth weekly decline, the survey shows. Distillate supplies, including heating oil and diesel, are expected to have decreased by 900,000 barrels.
The International Atomic Energy Agency and Iran agreed to carry out “practical measures” aiding inspections, and implementation will start within three months, the Vienna-based agency’s director, Yukiya Amano, said in Tehran yesterday. That includes access to Iran’s largest uranium mine, according to Ali Akbar Salehi, who heads the nation’s nuclear program.
Iran, a member of the Organization of Petroleum Exporting Countries, says its atomic development is for civilian energy and medical use and that it has a right to enrich uranium for peaceful purposes. The U.S. and its allies say Iran is covertly seeking nuclear-weapons capability.
OPEC’s biggest producer, Saudi Arabia, boosted exports in October amid reduced domestic demand, according to a person with knowledge of the nation’s output policy. The world’s largest crude exporter shipped 300,000 barrels a day more than in September, said the person, who asked not to be identified because the data hasn’t been officially released.
Crude prices will advance to $128 a barrel by 2035 with a 16 percent increase in consumption, supporting the development of so-called tight oil in the U.S. and a tripling in output from Brazil, the IEA said in its annual World Energy Outlook. OPEC’s role will recover in the middle of the next decade as other nations struggle to repeat North America’s success with exploiting shale deposits, the Paris-based agency predicted.
“The United States becomes the largest oil producer in the world, including crude, natural gas liquids and unconventional oil, by 2015 and retains this status until the beginning of the 2030s,” the adviser to 28 energy-consuming nations said.
Soaring shale output in the U.S. is helping the world’s largest oil consumer achieve its highest level of energy independence in two decades, cushioning it against disruptions in Africa and the Middle East. The boom threatens revenues for OPEC’s 12 members, whose production is near its lowest in two years amid political unrest in Libya and theft in Nigeria.