Brent Declines for Third Day as U.S. Crude Supplies Climb
Brent crude futures fell for a third session as U.S. inventories increased. Iraq resumed oil exports via Turkey today after a halt caused by sabotage to a pipeline.
Brent dropped as much as 0.8 percent. Total U.S. crude stockpiles rose by 230,000 barrels, according to the Energy Department. Iraq’s state-run North Oil Co. repaired the pipeline to Turkey following a bombing attack yesterday in the city of Mosul. Weekly U.S. jobless claims dropped to 323,000, 13,000 fewer than had been expected, according to a Bloomberg survey, and 3,000 fewer than in the previous week.
“We have seen a good rally over the last few days after the lows of last week, and now the market is taking stock,” said Michael Hewson, a market analyst at CMC Markets Plc in London who expects WTI to peak at $98 this year. “The latest weekly jobless claims failed to inspire any further enthusiasm.”
Brent for June settlement fell as much as 79 cents to $103.55 a barrel and was at $103.68 as of 1:40 p.m. London time on the ICE Futures Europe exchange. The volume of all contracts traded was 12 percent below the 100-day average.
West Texas Intermediate for June delivery was down 87 cents at $95.75 a barrel in electronic trading on the New York Mercantile Exchange. The volume of contracts traded was 30 percent above the 100-day average. The front-month European benchmark was at a premium of $7.89 to WTI.
The increase in U.S. crude inventories compares with a projected gain of 2 million in a Bloomberg News survey. Refinery run rates climbed 2.6 percentage points, the most since September, to 87 percent.
Gasoline stockpiles declined by 910,000 barrels last week, data from the Energy Information Administration show. They were forecast to slip by 475,000 barrels, according to the median estimate of 12 analysts in the Bloomberg survey. The U.S. Memorial Day holiday on May 27 marks the start of the nation’s peak driving period.
Distillate inventories, a category that includes heating oil and diesel, increased 1.8 million barrels, according to the EIA. They were predicted to advance by 500,000 barrels, the Bloomberg survey showed.
The 500-mile (805-kilometer) Seaway pipeline operated by Enterprise Products Partners LP (EPD) and Enbridge Inc. (ENB) won’t be able to carry its expected average of 335,000 barrels a day of crude in its first year of operation since it was expanded, according to a filing with the Federal Energy Regulatory Commission yesterday. Daily throughput will average about 295,000 barrels through May, the filing shows.
Seaway, which transports crude from Cushing, the largest U.S. oil-storage hub, to refineries in the Houston area, is operating below capacity because of limited offtake capability at the end of the line, which won’t be repaired until next year. The pipeline’s capacity was increased to 400,000 barrels a day on Jan. 11.
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