WTI Falls a Fourth Day for Biggest Weekly Drop in a Month
West Texas Intermediate crude fell for a fourth day, extending the biggest weekly drop in more than a month, amid signs of rising U.S. fuel supplies and a global economic slowdown.
WTI futures slid as much as 0.5 percent in New York. Manufacturing in China unexpectedly shrank in May, an index showed yesterday. U.S. gasoline stockpiles rose by 3 million barrels last week, according to government data released May 22. They were predicted to fall by 300,000 barrels in a Bloomberg survey. Brent crude may fall below $95 a barrel should the world’s economy weaken further, Bank of America Corp. said in a report.
“The tone of the market remains soft,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “Growth in oil demand has been very moderate. This week’s figures in the U.S. were a bit disappointing with a big build-up in gasoline inventories as we start to move into the early part of summer, showing a well-supplied market.”
WTI for July delivery fell as much as 49 cents to $93.76 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.93 at 5:17 p.m. Sydney time. The volume of all contracts traded was 44 percent below the 100-day average. Prices are 2.3 percent lower this week, the most since the seven days ended April 19.
Brent for July settlement fell 30 cents to $102.14 a barrel on the London-based ICE Futures Europe exchange. The front-month European benchmark was at a premium of $8.21 to WTI futures, up from $8.19 yesterday.
WTI may decline next week amid speculation that U.S. fuel supplies will be sufficient to meet summer demand as global economic growth weakens, according to a Bloomberg News survey. Twenty of 32 analysts and traders, or 63 percent, forecast crude will decrease through May 31. Seven respondents, or 22 percent, predicted an increase. Five projected no change.
U.S. daily gasoline production climbed by 285,000 barrels to 9.21 million last week, the most this year, according to data from the Energy Information Administration, the Energy Department’s statistical arm.
A preliminary gauge of China’s Purchasing Managers Index fell to 49.6 for May, according to HSBC Holdings Plc and Markit Economics yesterday. It was the least since October and missed estimates in a Bloomberg survey. A reading below zero signals a contraction. China is the world’s second-largest oil consumer, accounting for 11 percent of global demand in 2011, according to BP Plc (BP/)’s Statistical Review of World Energy. The U.S. is the biggest user at 21 percent.
To contact the reporter on this story: Ben Sharples in Melbourne at firstname.lastname@example.org
To contact the editor responsible for this story: Alexander Kwiatkowski at email@example.com