WTI Oil Fluctuates on the Way to Biggest Weekly Loss Since June
West Texas Intermediate swung between gains and losses as prices headed for the biggest weekly decline in four months, amid speculation that record U.S. crude production will further bolster stockpiles.
Futures were little changed in New York after snapping a three-day losing streak yesterday. The U.S. pumped oil at the fastest rate since 1989, while stockpiles rose to the highest level since June, government data showed this week. Saudi Arabia, the world’s largest crude exporter, is reducing shipments in response to a possible year-end surplus in supply, according to a tanker tracker.
“If stockpiles are high and trending higher, that’s going to be a concern for WTI,” said David Lennox, a resource analyst at Fat Prophets in Sydney. “There’s also a surge in U.S. domestic supply.”
WTI for December delivery was at $97.10 a barrel in electronic trading on the New York Mercantile Exchange, down 1 cent, at 3:08 p.m. Singapore time. The contract climbed 25 cents to $97.11 yesterday. The volume of all futures traded was about 46 percent less than the 100-day average. Prices have fallen 3.7 percent this week and poised for a third weekly drop.
Brent for December settlement slid 5 cents to $106.94 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a $9.84 premium to WTI, from $9.88 yesterday. The spread was $11.67 on Oct. 22, the widest since April.
U.S. crude output increased to 7.9 million barrels a day in the week ended Oct. 18, the most since March 1989, according to a report 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 nation, the world’s biggest oil consumer, will account for about 21 percent of global demand this year, almost double the estimate for China, forecasts from the International Energy Agency show.
In Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, crude exports are “starting to go down,” Roy Mason, the founder of Oil Movements, said yesterday. Shipments from OPEC, excluding Angola and Ecuador, will decrease by 0.5 percent to 23.8 million barrels a day in the four weeks to Nov. 9, according to the consultant in Halifax, England.
WTI may decline next week as U.S. oil supplies gain amid reduced demand, according to a 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 advance and five estimated no change. Last week, 61 percent in the survey said prices would fall.
To contact the reporter on this story: Ben Sharples in Melbourne at email@example.com
To contact the editor responsible for this story: Alexander Kwiatkowski at firstname.lastname@example.org