WTI Trades Near 17-Month Low on Cushing Stockpiles; Brent SteadyAnn Koh and Heesu Lee
West Texas Intermediate traded near the lowest price in more than 17 months after government data showed crude inventories expanded for a second week at the biggest U.S. oil-storage hub. Brent was steady in London.
Futures were little changed in New York after falling 0.5 percent yesterday. Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI contracts, increased by 315,000 barrels to 20.5 million last week, the Energy Information Administration reported. There’s no sense of urgency within the Organization of Petroleum Exporting Countries to reduce output even as the global market is oversupplied, according to Morgan Stanley.
“There’s quite a lot of other supply in the market right now,” Tetsu Emori, a senior fund manager at Astmax Asset Management Inc. in Tokyo, said by phone today. “OPEC hasn’t made any comments about production cuts. Until they do, oil prices will be losing momentum.”
WTI for November delivery was at $90.69 a barrel in electronic trading on the New York Mercantile Exchange, down 4 cents, at 2:50 p.m. Singapore time. The contract dropped 43 cents to $90.73 yesterday, the lowest close since April 23, 2013. The volume of all futures traded was 30 percent above the 100-day average. Prices have declined 7.9 percent this year.
Brent for November settlement was 6 cents lower at $94.10 a barrel on the London-based ICE Futures Europe exchange. It slid 51 cents to $94.16 yesterday, the lowest since June 28, 2012. The European benchmark crude traded at a $3.43 premium to WTI.
Crude inventories in the U.S., the world’s largest oil consumer, decreased by 1.36 million barrels to 356.6 million in the week ended Sept. 26, said the EIA, the Energy Department’s statistical arm. Supplies were forecast to gain by 1.5 million, according to the median estimate in a Bloomberg News survey of eight analysts.
Gasoline stockpiles shrank by 1.84 million barrels to 208.5 million last week, the data showed. That’s the lowest since November 2012. Distillates, including heating oil and diesel, fell by 2.89 million to 125.7 million.
WTI has technical support along its 30-day lower Bollinger Band, according to data compiled by Bloomberg. Futures halted intraday losses the past two days near this indicator, at about $90.50 a barrel today. Buy orders tend to be clustered around chart-support levels.
WTI dropped 13 percent in the July-September period while Brent slid 16 percent, the most in nine quarters. The declines are probably “still too limited in magnitude and duration to cause a rapid response” from OPEC, Morgan Stanley said in a report yesterday.
The 12-member group, responsible for about 40 percent of the world’s crude supply, pumped 30.935 million barrels a day in September, a separate Bloomberg survey of producers and analysts shows. That’s the highest in 13 months.