BLBG:WTI Crude Declines for a Second Day as U.S. Inventories Grow
West Texas Intermediate fell, extending a second monthly loss, as an increase in U.S. crude stockpiles signaled ebbing demand in the world’s biggest oil consumer.
Futures slid as much as 0.8 percent in New York after the industry-funded American Petroleum Institute said inventories rose last week by 5.9 million barrels. Supplies climbed by 2.4 million barrels to 382.2 million, the highest level in four months, according to a Bloomberg News survey of analysts before data today from the U.S. Energy Information Administration. Economists expect the Federal Reserve will maintain its $85 billion in monthly bond purchases at a meeting ending today.
“We’re having a demand slowdown while refinery runs are lower due to maintenance in the U.S., and hence the supply-demand balance is in surplus,” said Hakan Kocayusufpasaoglu, chief investment officer at Archbridge Capital AG, a Zug, Switzerland-based hedge fund. “Supply figures in the U.S. are going to be overwhelmingly strong for the forseeable future.”
WTI for December delivery declined as much as 80 cents to $97.40 a barrel in electronic trading on the New York Mercantile Exchange. It was at $97.58 at 9:15 a.m. London time. The volume of all futures traded was about 13 percent less than the 100-day average. Prices are down 4.7 percent in October, after losing 4.9 percent last month.
Brent for December settlement fell as much as 42 cents, or 0.4 percent, to $108.59 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $11.39 to WTI, from $10.81 yesterday.
Fuel Supplies
U.S. crude stockpiles have gained for the past five weeks, the API data show. The country will account for about 21 percent of global oil demand this year, almost double the estimate for China, the second-largest consumer, according to forecasts from the International Energy Agency in Paris.
Gasoline inventories increased by 740,000 barrels last week, the API said. The EIA, the Energy Department’s statistical unit, is expected to report a drop of 200,000 barrels, according to the median estimate of 11 analysts surveyed by Bloomberg. Distillate inventories, including heating oil and diesel, declined by 2.7 million barrels, compared with a projected 1 million decrease.
Fed’s Decision
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, which is scheduled to release its report at 10:30 a.m. in Washington.
The Fed will decide today to keep purchases of mortgage-backed securities at $40 billion and Treasury buying at $45 billion, according to another survey of economists.
WTI is falling after failing to breach technical resistance along the 200-day moving average for a second day yesterday, according to data compiled by Bloomberg. This indicator is at about $97.55 a barrel today. Sell orders tend to be clustered around chart-resistance levels.
“We’re seeing a picture of weakness,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. “The failure of WTI to break through $98.50 suggests that we have further downside.”
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
