WTI Trades Near Five-Month Low on U.S. Crude Supply Gain

West Texas Intermediate traded near a five-month low amid speculation U.S. crude inventories increased while supply concerns eased as talks on Iran’s nuclear program resume.

Futures were little changed in New York. Crude stockpiles are projected to gain 1 million barrels, according to a Bloomberg News survey before data from the Energy Information Administration today, compared with a 512,000-barrel build reported by the American Petroleum Institute. Supplies have climbed to 388.1 million barrels amid a surge in production, government data show. World powers and Iran will start discussions in Geneva today that may loosen sanctions against the Persian Gulf nation’s oil exports.

“We’ve seen a little short-covering on WTI as it trades off five-month lows ahead of inventory data later today,” said Michael Hewson, a London-based market analyst at CMC Markets Plc. “There’s a feeling that inventory data could actually come in a little short, but the overall outlook remains of plentiful supply, which should cap any short term rallies.”

WTI for December delivery, which expires today, gained 20 cents to $93.54 a barrel as of 1:39 p.m. London time in after hours electronic trading on the New York Mercantile Exchange. The more-active January contract climbed 23 cents to $94.12. The volume of all futures traded was 41 percent below the 100-day average.

Brent for January settlement dropped as much as 41 cents, or 0.4 percent, to $106.51 a barrel on the London-based ICE Futures Europe exchange. It was at a premium of $12.66 to WTI for the same month. The spread was $13.03 yesterday, the narrowest in a week based on closing prices.

Gasoline Supplies

U.S. gasoline inventories slid by 300,000 barrels in the seven days ended Nov. 15, according to the median estimate of 11 analysts surveyed by Bloomberg. Stockpiles have fallen the previous five weeks to 209.2 million, the lowest level in a year, said the EIA, the Energy Department’s statistical arm.

The API yesterday reported an 84,000-barrel increase in supplies of gasoline. The industry group in Washington collects data on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA.

Distillate stockpiles, including heating oil and diesel, are forecast to have dropped by 280,000 barrels, according to the survey. Supplies decreased by 4.9 million, the API said.

Iran Talks

Iran and the five permanent members of the United Nations Security Council plus Germany will hold their third round of negotiations in six weeks to break a decade-long deadlock and help remove sanctions against the Persian Gulf state, which have cut oil exports.

Brent, the benchmark crude for half the world’s crude, advanced the most in almost two weeks on Nov. 8 after U.S. Secretary of State John Kerry downplayed the chances of a nuclear accord. Iranian Foreign Minister Mohammad Javad Zarif and European Union foreign policy chief Catherine Ashton will be joined in the negotiations by senior diplomats from China, France, Germany, Russia, the U.K. and the U.S.

Iran says its atomic development is for civilian energy and medical use and that it has a right to enrich uranium for peaceful purposes. The U.S. and its allies say Iran is covertly seeking nuclear-weapons capability.

Israeli officials, led by Prime Minister Benjamin Netanyahu, have criticized a potential agreement, which falls short of United Nations Security Council resolutions demanding Iran halt all enrichment. Saudi Arabia, the world’s largest oil exporter, has also expressed skepticism about a deal with a nation they regard as a threat to the region.

Libyan Exports

Oil prices also declined after exports from Libya increased as an oil terminal in the center-east of the country loaded its first crude cargo in at least a month.

The Matilda, a tanker able to haul about 600,000 barrels, was loading at the Brega facility and was scheduled to depart yesterday, Ibrahim Al Awami, the director of measurement for the oil ministry, said by phone. National Oil Corp. said Nov. 18 that a ship would load at Mellitah, a facility in the west.

“Libya is still far from being at full output as it is still missing large volumes from Ras Lanuf and Es Sider but we count 3 million barrels of crude oil loadings this week and this is still a supply improvement, for now,” Olivier Jakob, managing director at Petromatrix GmbH, said in an e-mailed report today.

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