WTI Oil Swings, Poised for Biggest Weekly Loss Since June

West Texas Intermediate swung between gains and losses as it headed for the biggest weekly decline since June, amid speculation that record U.S. crude production will further bolster stockpiles.

Futures traded in a 66 cents-a-barrel range in New York after gaining for the first time in four days yesterday. Government data this week showed the U.S. pumped crude at the fastest rate since 1989, while stockpiles rose during the U.S. fall refinery maintenance season to the highest level since June. Saudi Arabia, the world’s largest oil exporter, is reducing shipments in response to a possible surplus in supply, according to data from a tanker tracker yesterday.

“Lower crude oil processing led to rising U.S. crude oil inventories, which pushed prices lower in recent days,” said Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt. “Processing rates must almost reach summer peak levels to drain inventories again, given rising supplies.”

WTI for December delivery was at $97.38 a barrel on the New York Mercantile Exchange, up 27 cents, at 1:24 p.m. London time. The contract climbed as much as 54 cents in intraday trading and fell as much as 12 cents, the narrowest range this month, so far. The volume of all futures traded was about 44 percent less than the 100-day average. Prices eased 3.7 percent this week, poised for a third weekly decline.

Brent for December settlement fell 6 cents to $106.93 a barrel on the London-based ICE Futures Europe exchange.

Grangemouth Refinery

Ineos Group Holdings SA announced today it will immediately reopen Scotland’s Grangemouth petrochemical site and start up the adjacent refinery after forging a deal with the unionized workforce. The site provides steam and power to a facility that processes Forties crude from a North Sea pipeline, which had continued to operate throughout this month’s dispute.

U.S. crude production rose to 7.9 million barrels a day in the week ended Oct. 18, the most since March 1989, according to data from the Energy Information Administration on Oct. 23. Stockpiles expanded for a fifth week to 379.8 million barrels, the Energy Department’s statistical unit said.

The U.S., the world’s biggest oil consumer, will account for about 21 percent of global demand this year, almost double China’s share, according to forecasts from the International Energy Agency.

Saudi Arabia

Saudi Arabia’s crude exports are “starting to go down” as the largest member of the Organization of Petroleum Exporting Countries sought to avoid a possible year-end supply glut, according to Roy Mason, the founder of Oil Movements. Shipments from the group, excluding Angola and Ecuador, will slide 0.5 percent to 23.8 million barrels a day in the four weeks to Nov. 9, according to the Halifax, England-based tanker-tracking consultant.

WTI may decline next week as U.S. oil supplies gain amid reduced demand, according to Bloomberg News survey. Twenty-one of 31 analysts and traders, or 68 percent, forecast futures will drop through Nov. 1. Five respondents, or 16 percent, predicted an increase and five estimated no change. Last week, 61 percent in the survey said prices would fall.

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