BLBG:Crude Oil Declines From 5-Week High as Libyans Discuss Output, Storm Spins
Crude futures declined, reversing earlier gains and part of yesterday’s 3.9 percent rally in New York as Libyan officials discuss the prospect of resuming production and a tropical storm spins in the Gulf of Mexico.
Libya’s oil industry will be prepared to resume production within two weeks, the rebel council’s Oil and Finance Minister Ali Tarhouni said in Tripoli, the Wall Street Journal reported yesterday. Tropical Storm Nate is churning in the Gulf of Mexico while two other storms are far out to sea in the Atlantic.
“We’re seeing a different picture economically and the prospect of Libyan supply returning,” said Axel Herlinghaus, a Frankfurt-based senior commodities analyst at DZ Bank AG, which trades crude contracts in New York and London. “The Brent price is too high, you just can’t justify current levels.”
Oil for October delivery fell 52 cents, or 0.6 percent, to $88.82 a barrel on the New York Mercantile Exchange as of 8:54 a.m. London time, after rising as much as 0.9 percent earlier today. Futures closed yesterday at $89.34, the highest since Aug. 3.
Brent crude oil for October settlement was at $115.06 a barrel, down 74 cents, on the London-based ICE Futures Europe Exchange.
The industry-funded American Petroleum Institute said yesterday U.S. crude inventories fell 2.97 million barrels last week. An Energy Department report due later today is expected to show supplies dropped by 2 million after Tropical Storm Lee disrupted production, according to a Bloomberg News survey.
DOE Report
The U.S. Energy Department will release its weekly stockpile data at 11 a.m. Washington time today. The API and government reports are a day later than usual because of the Sept. 5 Labor Day holiday.
Gasoline inventories dropped 871,000 barrels last week to 209.9 million, the API data shows. The government report may show they declined 1.4 million, according to the median of 15 analyst estimates in the Bloomberg News survey.
Distillate-fuel supplies, a category that includes heating oil and diesel, increased by 3.95 million barrels to 157.1 million, according to the API data. The Energy Department report may show they rose by 500,000 barrels, the survey shows.
Oil-supply totals from the API and the department have moved in the same direction 71 percent of the time in the past year. The API collects data on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed for its weekly survey.
To contact the reporter on this story: Rachel Graham in London rgraham13@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
