West Texas Intermediate crude headed for a sixth weekly decline, the longest in 15 years, as rising supplies in the U.S. countered speculation the Federal Reserve will maintain economic stimulus.
Futures have lost 0.5 percent in New York this week, poised for the longest weekly losing streak since December 1998. U.S. crude inventories climbed to the highest level since June as expanding production caused stockpiles to increase at the storage hub in Cushing, Oklahoma, data yesterday from the Energy Information Administration show. Janet Yellen, the nominee for Federal Reserve chairman, said she will ensure the central bank’s asset purchases program doesn’t end too soon.
“The numbers were mildly bearish as the Cushing build would limit the upside in WTI,” said Andrey Kryuchenkov, an analyst at VTB Capital in London.
WTI for December delivery increased 34 cents to $94.10 a barrel in electronic trading on the New York Mercantile Exchange at 1:52 p.m. London time. The volume of all futures traded was 42 percent below the 100-day average.
Brent for January settlement declined 31 cents to $107.97 a barrel on the London-based ICE Futures Europe exchange. The December contract expired yesterday after rising 1.3 percent to $108.54. The European benchmark crude was at a premium of $13.24 to WTI for the same month, compared with $14.78 yesterday, the highest based on closing prices since March.
Crude inventories surged 2.64 million barrels last week, more than triple the median 800,000 barrel-gain estimated in a Bloomberg News survey of analysts. Supplies climbed to 388.1 million as output expanded to the highest since January 1989, according to the EIA, the Energy Department’s statistical arm.
Stockpiles at Cushing the delivery point for WTI contracts and the nation’s largest oil-storage facility, climbed by 1.7 million barrels to 38.2 million.
Gasoline stockpiles fell by 838,000 barrels to 209.2 million, the lowest level since November last year, said the EIA. A 900,000 barrel decline was forecast in the survey. Distillate, including heating oil and diesel, shrank 481,000 barrels, compared with a projected drop of 1 million.
WTI prices plunged to a 12-year low near $10 a barrel in December 1998 as demand fell after the Asian financial crisis, while the Organization of Petroleum Exporting Countries failed to implement an agreement made in June of that year to cut supplies.
WTI may advance next week on signs the Fed will maintain stimulus, according to a separate Bloomberg survey. Nine of 23 analysts and traders, or 39 percent, forecast futures will rise through Nov. 22. Eight respondents projected little change and six said prices will decrease.
Yellen said she’s committed to promoting a strong economic recovery. Her testimony to the Senate Banking Committee in Washington yesterday signaled she may maintain the strategies of Chairman Ben S. Bernanke, whose term ends on Jan. 31.
“Dovish comments from Yellen are providing support,” said Michael McCarthy, a chief strategist at CMC Markets in Sydney. “Some of those funds that are being redeployed across asset classes are flowing into oil. The fundamentals, the supply side in particular, are pointing in the other direction and that’s another reason why today looks like investment support.”