BLBG:WTI Oil Futures Decline to Trade Near $90 a Barrel
West Texas Intermediate crude fell to trade near $90 a barrel after money managers cut bets on rising prices.
Futures retreated for a third day in New York after sliding to a 10-week low on March 1. Net-long positions in WTI dropped 16 percent, according to data from the Commodity Futures Trading Commission. Services industries in China expanded at the slowest pace in five months in February, a survey of purchasing managers showed yesterday.
“Oil is going to remain under pressure for a while yet,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London, who correctly predicted last month that prices were set to drop. “When prices were strong last month there was an influx of fresh speculative buying, and the opposite is happening now.”
WTI for April delivery fell as much as 59 cents to $90.09 a barrel in electronic trading on the New York Mercantile Exchange. It was at $90.51 at 11:33 a.m. London time. The volume of all futures traded was 10 percent below the 100-day average. Prices declined 2.6 percent last week for a second weekly drop and are down 1.4 percent this year. WTI last traded at $90 on Dec. 31.
Bullish Bets
Brent for April settlement gained 11 cents to $110.50 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 52 percent higher than the 100- day average. The European benchmark grade was at a premium of $19.99 to WTI futures, from $19.72 on March 1.
Money managers’ net-long positions in WTI for the week ended Feb. 26 fell by 32,790 futures and options combined, the most since Dec. 11, to 175,211, the CFTC data showed March 1. The same category of investors increased positions on natural gas by 21 percent to the largest for the time of year since 2010.
ICE will publish weekly data for trader commitments on Brent futures and options at about noon London time today.
“The gloss of the recovery has been tarnished,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin, a commodity newsletter in Sydney. “We can see continued weakness in the demand picture for crude.”
China’s non-manufacturing Purchasing Managers’ Index fell to 54.5 in February from 56.2 in January, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday. The country accounted for 11 percent of the world’s oil consumption in 2011, according to BP Plc (BP/)’s Statistical Review of World Energy. The U.S. used 21 percent.
Libya Fighting
Crude output near the Libyan town of Zawara stopped on March 2 after militias clashed, Oil Minister Abdulbari al-Arusi told Al Jazeera television.
Oil-production facilities weren’t damaged in fighting between the two factions, Walid Mohammed, director of public relations for the Ministry of Defense’s Petroleum Facility Guard, said by phone yesterday. Government troops secured the area and stopped the fighting, he said, adding he didn’t know when output would resume.
Eni SpA (ENI), Italy’s biggest oil company, halted gas shipments through the Greenstream pipeline linking Libya and Italy, a company spokesman said in an e-mail yesterday. Eni and Libya’s National Oil Co. are equal partners in Greenstream BV and the Mellitah Oil & Gas BV processing plant. The plant resumed operation, Libyan state radio reported today without citing anyone.
Brent Pipeline System
The Brent Pipeline System in the North Sea remained shut for a third day today, affecting flows of 90,000 barrels a day, after a hydrocarbon release at an oil platform on March 2, according to the operator Abu Dhabi National Energy Co. (TAQA), also known as Taqa. The pipeline normally carries about 10 percent of the U.K.’s oil output.
Oil may rebound in New York as a technical indicator shows further losses may be unsustainable. WTI’s 14-day relative strength index is at 30.1, the lowest since June 28, according to data compiled by Bloomberg. A reading below 30 signals prices have fallen too quickly and may change direction. Futures have technical support along the 200-day moving average, about $90.37 a barrel today. Buy orders tend to be clustered near chart- support levels.
Prices will remain “at or below the current range over the next few years,” Christof Ruehl, the chief economist at BP, told reporters today in Sydney.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
