West Texas Intermediate crude fell for a second day, extending the biggest drop in two weeks, while Brent futures were little changed. Oil prices are restraining the global economy, according to Fatih Birol, the International Energy Agency’s chief economist. Futures lost as much as 0.6 percent, compounding a 1.5 percent drop on Feb. 15, the most since Feb. 4. Floor trading on the New York Mercantile Exchange was closed yesterday because of a holiday in the U.S. Saudi Arabian crude exports rose to a seven-year high in 2012, according to the Joint Organisations Data Initiative. Money managers reduced bullish bets on Brent from the highest level in more than two years. “From a technical analysis point of view, we have a distinct potential double-top formation in West Texas, which is a classic bearish indicator,� said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “A break below $94.90 would be seen as a sign of weakness in WTI.� WTI for March delivery, which expires tomorrow, slid as much as 61 cents to $95.25 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.53 at 3:41 p.m. Sydney time. The more-active April future dropped 37 cents to $96.04. Yesterday’s transactions will be booked with today’s trades for settlement. Brent for April settlement rose 4 cents to $117.42 a barrel on the London-based ICE Futures Europe exchange. The volume was 41 percent below the 100-day average. The front-month European benchmark grade was at a premium of $21.38 to WTI futures. The gap expanded to $23.18 on Feb. 8, the widest since Nov. 26. Bullish Bets London-traded Brent may be capped at $140 a barrel this year as energy consumption as a share of gross domestic product may climb to 9 percent, undermining oil demand, Francisco Blanch, head of commodities research at Bank of America Merrill Lynch, said in report dated yesterday. The European benchmark contract will trade in a range of $100 to $130 a barrel through to 2015, he said. Money managers reduced bullish bets on Brent for the first time in a month, according to data from ICE Futures Europe. Speculative bets that prices will rise outnumbered short positions by 192,154 lots in the week ended Feb. 12, the London- based exchange said yesterday. While that’s little changed from 192,195 a week earlier, the reduction of 41 lots is the first drop since Jan. 15. North Sea Platts, which publishes global oil price assessments, proposed changes to its benchmark North Sea crude pricing formula less than two weeks after Royal Dutch Shell Plc changed its own trading contract. The price of the Ekofisk and Oseberg North Sea grades would be adjusted to account for their superior quality, said Jorge Montepeque, global director of markets and pricing at the unit of McGraw-Hill Cos. The grades are among four that make up the Dated Brent marker used to price more than half the world’s oil. The IEA’s annual World Energy Outlook report, due later this year, will focus on U.S. oil supply, Birol said at the start of International Petroleum Week in London. Saudi Arabia, the largest producer in the Organization of Petroleum Exporting Countries, exported 7.41 million barrels a day on average in 2012, up 5.2 percent from 2011, according to Bloomberg calculations based on monthly data from JODI. Last year’s shipments were the highest since the kingdom’s exports averaged 7.47 million a day in 2005, the data showed. Output from Saudi Arabia dropped to a 19-month low of 9.03 million barrels a day in December, according to JODI, which cited statistics the government submitted to OPEC. The kingdom is likely to cut oil supply further though the size of any reduction will depend on the actions of fellow OPEC members, Christof Ruehl, chief economist at BP Plc, said in an interview in London yesterday. 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 at akwiatkowsk2@bloomberg.net

Source