WTI Falls as Supplies Rise, OPEC Trims Demand ForecastGrant Smith and Konstantin Rozhnov
West Texas Intermediate fell, halting a two-day advance as a report showed stockpiles of U.S. crude increased to the highest level since 1981.
Futures slipped as much as 0.6 percent in New York after the industry-funded American Petroleum Institute said inventories gained 5.1 million barrels last week. An Energy Department report today may show supplies advanced 1.5 million barrels to about 391 million, the highest in 22 years, according to a Bloomberg survey of analysts. OPEC trimmed its estimate for global oil demand growth.
“The second quarter is the weakest from the perspective of oil global demand,” said Hannes Loacker, an analyst at Raiffeisen Bank International AG in Vienna. Brent crude may drop further, he said. The blend slumped 5.4 percent last week.
WTI for May delivery slid as much as 52 cents to $93.68 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.84 at 12:46 p.m. London time. The volume of all futures traded was 24 percent less than the 100-day average. The contract increased 84 cents to $94.20 yesterday, its biggest gain since March 26 and the highest close since April 3.
Brent for May settlement lost 30 cents to $105.93 a barrel on the London-based ICE Futures Europe exchange today. The European benchmark had a premium of $12.09 to WTI, up from $12.03 at yesterday’s close. The premium settled at $11.30 on April 8, the narrowest since June 22.
U.S. gasoline supplies increased by 1.96 million barrels last week, the API said. They are forecast to fall 1.5 million barrels in the government report due at 10:30 a.m. in Washington, according to the median estimate of 11 analysts in a Bloomberg survey. Distillate inventories, a category that includes heating oil and diesel, slid 1.3 million barrels in the API report, compared with a projected 1.5 million-barrel decline in the Energy Department’s report.
“Demand in the U.S. is still very weak and we can’t see any change to that,” said David Lennox, an analyst at Fat Prophets in Sydney. “That’s on the back of continued low economic activity and high unemployment. There is probably no reason why the Energy Department figures will be any different” to the API data, he said.
Prices and Demand
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Information Administration, the Energy Department’s statistics unit, for its weekly survey.
The EIA increased its WTI price forecast for 2013 late yesterday, predicting new pipeline and rail capacity will narrow the grade’s discount to Brent. New York crude will average $93.92 a barrel this year, up 2.2 percent from a March projection of $91.92, the EIA said in its Short-Term Energy Outlook yesterday.
Worldwide oil consumption will rise this year by 800,000 barrels a day, or 0.9 percent, revised down from 840,000 last month, the Organization of Petroleum Exporting Countries said in its monthly oil market report today. “Demand in the second half of this year is seen to be much higher than the first,” OPEC said. “The bulk of the growth is expected to come from China.”
China, the world’s second-biggest oil consumer, bought 22.78 million metric tons of crude more than it exported last month, according to figures released on the website of the Beijing-based General Administration of Customs today. That’s equivalent to net imports of 5.39 million barrels a day, the fewest since September, data compiled by Bloomberg show.