BLBG:Oil Declines From One-Week High as Crude Stockpiles Seen Rising
Oil declined from the highest price in a week in New York on speculation that crude stockpiles climbed in the U.S., the world’s biggest user of the commodity.
Futures slid as much as 0.7 percent after surging 3.4 percent yesterday amid increased tension in the Middle East. Crude inventories probably rose 1.5 million barrels last week, according to a Bloomberg News survey before an Energy Department report tomorrow. The American Petroleum Institute will release separate supply data later today. London-traded Brent prices are still high and Saudi Arabia will work toward “moderating” them, Oil Minister Ali al-Naimi said yesterday.
“We’re still in an oversupply situation,” said Filip Petersson, a commodities strategist at SEB AB in Stockholm, who predicts Brent crude will average $110 a barrel this quarter. “There’s upside risk on the geopolitical side, but then of course there are headwinds from slowing growth.”
Crude for November delivery dropped as much as 68 cents to $91.71 a barrel in electronic trading on the New York Mercantile Exchange and was at $92 at 9:46 a.m. London time. The contract increased $3.06 yesterday to $92.39, the highest close since Oct. 1. Prices are down 7 percent this year.
Brent for November settlement on the ICE Futures Europe exchange dropped as much as 70 cents, or 0.6 percent, to $113.80 a barrel. It gained 2.4 percent to $114.50 yesterday. The European benchmark crude was at a premium of $22.49 to New York- traded West Texas Intermediate. The spread was also $22.49 on Oct. 8, the widest gap based on closing prices since October 2011.
Mideast Tension
Oil is declining in New York after reaching technical resistance along its middle Bollinger Band, according to data compiled by Bloomberg. Futures yesterday halted their advance near this indicator, at around $92.93 a barrel today. Sell orders tend to be clustered near chart-resistance levels.
Saudi Arabia, the world’s biggest crude exporter, wants to see Brent closer to $100 a barrel, al-Naimi told reporters in Riyadh yesterday before a conference of oil ministers from the Gulf Cooperation Council. The six countries in the council accounted for 24 percent of the world’s crude supplies last year, according to BP Plc (BP/)’s Statistical Review of World Energy.
Oil surged yesterday after Turkish guns fired on Syrian artillery units and tanks for a sixth day. The attacks follow the deaths of five people struck by a Syrian shell in Turkey on Oct. 3. Tension between the two countries has risen with the 19- month rebellion against Syrian President Bashar al-Assad’s government, as Turkey has offered support for the rebels.
U.S. President Barack Obama signed an executive order yesterday approving a framework for tighter sanctions on Iran, White House spokesman Tommy Vietor said in an e-mailed statement. Iran is facing restrictions on its energy exports imposed by Western countries that allege it is building nuclear weapons.
Fuel Supplies
U.S. gasoline stockpiles rose 375,000 barrels last week, according to the median estimate of 10 analysts surveyed ahead of the Energy Department report. Distillate-fuel supplies, a category that includes heating oil and diesel, probably fell 250,000 barrels. The department is releasing the data a day later than usual because of the Columbus Day holiday on Oct. 8.
The industry-funded API collects inventory information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Gasoline traded on Nymex rose 2.3 percent to $2.9587 a gallon yesterday as U.S. refinery shutdowns threatened supplies, boosting spot values in New York Harbor and sending California pump prices to record highs. Futures for November delivery were at $2.9642 a gallon today.
Winter Fuel
Immediate-delivery gasoline in New York Harbor traded at 24.5 cents above futures yesterday, the most for this time of year in at least a decade. The motor fuel climbed to $4.671 a gallon at the pump in California, according to AAA, the largest U.S. motoring organization.
Valero Energy Corp. (VLO) said yesterday that it’s blending winter gasoline at its California refineries in Benicia and Wilmington after Governor Jerry Brown directed state regulators to allow the making of the fuel grade earlier than usual to boost supplies. Winter gasoline isn’t normally sold until after October and the end of the smog season because it reduces air quality more than the summer grade.
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
