WTI Oil Slips to 4-Month Low as U.S. Crude Supply RisesWinnie Zhu and Rupert Rowling
West Texas Intermediate oil fell to the lowest in more than four months amid speculation U.S. crude supplies will be sufficient.
Futures in New York sank as much as 0.6 percent, extending last week’s 3.3 percent decline. Crude stockpiles in the U.S., the world’s biggest oil consumer, rose for the past six weeks, according to government data. Libya is preparing to resume exports from two terminals, a spokesman for the state oil company said.
“The oil market has been oversupplied for some time now and that hasn’t changed,” Myrto Sokou, senior research analyst at Sucden Financial Ltd. in London, said by phone. “It is now reacting more to macro-financial news than fundamental data, so the main focus of the day will be the release of key U.S. economic data.”
WTI for December delivery fell as much as 55 cents to $94.06 a barrel in electronic trading on the New York Mercantile Exchange, the lowest intraday price since June 26. The contract was at $94.17 at 1:38 p.m. London time. The volume of oil futures traded in New York was about 36 percent below the 100-day average.
Brent for December settlement was down 70 cents at $105.21 a barrel on the London-based ICE Futures Europe exchange. It last traded as low as $105 on July 4. The European benchmark crude was at a premium of $11.04 to WTI, compared with $11.30 on Nov. 1.
WTI slid the past four weeks, the longest losing streak in 17 months, amid expanding U.S. crude supplies. Stockpiles increased to 383.9 million barrels in the seven days through Oct. 25, the highest level since June, data from the Energy Information Administration showed last week. Inventories at Cushing, Oklahoma, the delivery point for New York-traded futures, rose to 35.5 million, the most in two months, according to the Energy Department’s statistical unit.
“The big risk is to the downside, even though prices have come off quite a bit,” said Ric Spooner, chief market analyst at CMC Markets in Sydney. “For the supply side, the market isn’t so concerned about the risk premium in the Middle East. If we just look at the basic demand and supply figures, we could expect prices to go below $90 a barrel.”
Crude prices may decrease as the “intensity” of supply disruptions, which tightened the market in the third quarter, eases, Barclays Plc said in a report on Nov. 1. The bank maintained its fourth-quarter forecast for Brent crude at $105 a barrel.
Libya is scheduled to load crude from the Mellitah export terminal tomorrow, with exports likely to follow from Hariga port next week, according to Mohamed Elharari, a spokesman for the state-run National Oil Corp.
Output in Libya, holder of Africa’s largest proven oil reserves, was about 250,000 barrels a day yesterday, Elharari said. It averaged 450,000 barrels a day in October, according to a monthly Bloomberg survey of production across the Organization of Petroleum Exporting Countries.
WTI’s decline may stall as a technical indicator signals further losses may not be sustainable. The 14-day relative strength index is below 30 for a second day, according to data compiled by Bloomberg. Crude rebounded in April from about $86 a barrel when the RSI was last below that level. Investors typically buy contracts when the market is oversold.
China’s non-manufacturing Purchasing Managers’ Index gained to 56.3 in October from 55.4 in September, the National Bureau of Statistics and China Federation of Logistics said in Beijing yesterday.
The Asian nation, the world’s second-biggest oil consumer, will account for about 11 percent of global demand this year, compared with 21 percent for the U.S., according to forecasts from the International Energy Agency.