BLBG:Oil Declines From One-Week on Forecast That U.S. Stockpiles Increased
Oil dropped from the highest close in more than a week before a report forecast to show that crude and gasoline stockpiles increased in the U.S.
Futures slipped as much as 0.8 percent, the first decline in three days. An Energy Department report tomorrow will probably show oil inventories rose for the first time in four weeks, according to a Bloomberg News survey. Money managers included hedge funds reduced bullish bets on oil for the week ended Nov. 22, according to data released yesterday by ICE Futures Europe and the Commodity Futures Trading Commission.
“We’ve had more positioning in oil recently with the speculators coming in on the long side, particularly once we broke through that $92 level,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty. in Sydney who sees technical resistance for New York crude at $102. “When we get moves as we’ve seen overnight, the short-term interest is simply taking profit.”
Crude oil for January delivery fell as much as 74 cents to $97.47 a barrel in electronic trading on the New York Mercantile at was at $97.58 at 12:35 p.m. Sydney time. The contract rallied yesterday on signs of economic recovery in the U.S. and potential supply disruptions in the Middle East, advancing as much as 4.1 percent to $100.74 before closing at $98.21, the highest since Nov. 17. Prices are up 14 percent from a year ago.
Brent oil for January settlement dropped 60 cents, or 0.6 percent, to $108.40 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $10.83, compared with $10.79 yesterday and a record $27.88 on Oct. 14.
Bullish Bets
Hedge-funds and other money managers cut bullish bets on Brent crude by 5,356 contracts in the week ended Nov. 22, London-based ICE said yesterday in its weekly Commitment of Traders report.
Net-long bets on West Texas Intermediate, the Nymex contract for crude delivered to the Cushing, Oklahoma, storage hub, fell by 26,387, or 12 percent, to 189,688, CFTC data show. It was the largest drop since the week ended Aug. 2.
U.S. crude inventories probably rose 1 million barrels last week, according to the median of seven analyst estimates in a Bloomberg News survey. Gasoline supplies likely increased 1.1 million barrels, the survey shows. The Energy Department is scheduled to release its report tomorrow in Washington.
OPEC's Quota
The Organization of Petroleum Exporting Countries may keep oil production quotas at current levels when they meet next month, Ecuador’s Non-Renewable Natural Resources Minister Wilson Pastor said yesterday. The group is scheduled to meet in Vienna for an annual conference on Dec. 14.
Venezuela is seeking to maintain current OPEC quotas, Oil Minister Rafael Ramirez said yesterday. Member countries exceeding the limit should lower their output, he said. The group’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
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