WTI Drops After Biggest Gain in a Month on InventoriesGrant Smith
West Texas Intermediate crude slipped after the biggest gain in a month amid forecasts that inventories of gasoline expanded last week in the U.S., the world’s largest oil consumer.
Futures were little changed after retreating as much as 0.8 percent in New York. Gasoline stockpiles probably climbed by 1.2 million barrels last week, while distillate supplies, including heating oil and diesel, may have gained 1.5 million barrels, according to a Bloomberg News survey before an Energy Information Administration report tomorrow. Crude inventories declined by an estimated 650,000 barrels last week, sliding from an 82-year high, the survey showed.
“The market is in bad shape,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “Demand is sluggish, and supplies are ample.”
WTI for July delivery slid as much as 72 cents to $92.73 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.29 as of 1:24 p.m. London time. The volume of all futures traded was 11 percent below the 100-day average. The contract rose $1.48 to $93.45 yesterday, the biggest gain since May 3.
Brent for July settlement rose 19 cents to $102.25 a barrel on the ICE Futures Europe exchange, reversing an earlier loss of 0.5 percent. The European benchmark grade was at a premium of $8.96 to WTI, up from $8.61 yesterday.
WTI is resuming its decline after failing to breach technical resistance for a third day, according to data compiled by Bloomberg. Futures yesterday halted an intraday rebound below the middle Bollinger Band, around $94.25 a barrel today, signaling that is where sell orders may be clustered.
U.S. refineries may have increased operating rates for the first time in three weeks, rising 0.6 percentage points to 87 percent of capacity, the Bloomberg survey showed before the report from the EIA, the Energy Department’s statistical arm. Memorial Day on May 27 marked the start of the nation’s peak driving period.
The American Petroleum Institute is scheduled to release separate data today at 4:30 p.m. in Washington. The industry group collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA for its weekly survey.
Brent slipped after Nexen Inc. said yesterday that the North Sea Buzzard oil field it operates will start in the middle of this week after equipment failure caused production to be halted. Supply from the 200,000 barrel-a-day Buzzard field makes up about half of the benchmark Forties crude stream.