Aug. 22 (Bloomberg) -- West Texas Intermediate crude headed for a fifth weekly decline, the longest falling streak in nine months, while investors await a speech from Federal Reserve Chair Janet Yellen. Brent slipped amid adequate supplies.
Futures declined 0.4 percent in New York, bringing the weekly loss to 3.9 percent. Traders are watching for signs of the timing of interest-rate increases from Yellen, who speaks today at a Fed symposium in Jackson Hole, Wyoming. A preliminary gauge of Chinese manufacturing missed estimates yesterday, bolstering concerns that demand growth will slow.
“The main pressure is because of the oversupply we see in the market,” Hans van Cleef, energy economist at ABN Amro Bank NV in Amsterdam, said by phone. “There’s a lot of cash at the moment that needs to be invested somewhere, perhaps in commodities. If something comes out of the meeting that will hurt the amount of money, it certainly will not be supportive.”
WTI for October delivery dropped 39 cents to $93.57 a barrel in electronic trading on the New York Mercantile Exchange at 1:22 p.m. London time. The volume of all futures traded was about 35 percent below the 100-day average for the time of day. Front-month prices have decreased 4.9 percent this year.
Brent for October settlement declined 26 cents to $102.37 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $8.78 to WTI on ICE, compared with $8.21 at the end of last week.
China’s flash Purchasing Managers’ Index for August slid to 50.3, HSBC Holdings Plc and Markit Economics said yesterday. That’s below July’s final reading of 51.7 and a median 51.5 projected by economists surveyed by Bloomberg, adding to risks that the world’s second-largest economy will miss its growth target this year.
Crude supplies at Cushing, Oklahoma, the delivery point for WTI futures, expanded by 1.76 million barrels to 20.2 million, the EIA, the Energy Department’s statistical arm, reported on Aug. 20. Stockpiles at the biggest U.S. oil-storage hub have gained for three weeks as a fire shut CVR Energy Inc.’s refinery in Coffeyville, Kansas. The plant, with a capacity to process 115,000 barrels a day of crude, is supplied from Cushing.
“More oil is coming to market instead of less, and combined with weaker demand that is adding pressure,” said ABN Amro’s van Cleef. “Chinese data has been somewhat disappointing, the euro zone has been weak, and the U.S., while better than Europe, has been mixed.”
Still, WTI may rise next week amid speculation that U.S. inventories will decline on increased refinery demand, a separate Bloomberg survey shows. Thirteen of 35 analysts and traders, or 37 percent, forecast futures will advance through Aug. 29, while 12 respondents expect lower prices.
Brent, set for a second weekly decline, has technical support along its lower Bollinger Band at about $101 a barrel today, data compiled by Bloomberg show. Futures halted intraday losses near this indicator the past two days. Buy orders tend to be clustered around chart-support levels.
To contact the reporter on this story: Grant Smith in London at email@example.com
To contact the editors responsible for this story: Alaric Nightingale at firstname.lastname@example.org James Herron, Randall Hackley