West Texas Intermediate crude traded near the lowest level in 10 weeks after a report showed money managers cut their bets prices will rise. Libya halted some oil production and natural gas shipments amid fighting.
Futures were little changed in New York after sliding the most in more than a week March 1. Net-long positions in WTI dropped 16 percent, according to data from the Commodity Futures Trading Commission. Services industries in China, the second- biggest oil user, expanded at the slowest pace in five months in February, a survey of purchasing managers showed. Crude output near the western Libyan town of Zawara stopped March 2 because of clashes between rival militias, Oil Minister Abdulbari al- Arusi told Al Jazeera television by phone.
“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.”
WTI for April delivery was at $90.44 a barrel, down 24 cent, in electronic trading on the New York Mercantile Exchange at 2:33 p.m. Singapore time. The volume of all futures traded was 30 percent above the 100-day average. The contract fell 1.5 percent to $90.68 on March 1, the lowest close since Dec. 24. Prices declined 2.6 percent last week for a second weekly drop and are down 1.5 percent this year.
Bullish Bets
Brent for April settlement slid 1 cent to $110.39 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was more than double the 100-day average. The European benchmark grade was at a premium of $19.95 to WTI futures, from $19.72 on March 1.
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. Money managers increased positions on gas by 21 percent to the largest for the time of year since 2010.
The oil-production facilities in Libya near Zawara weren’t damaged in fighting between two rival militias, Walid Mohammed, director of public relations for the Ministry of Defence’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. Mellitah has daily production of 600,000 barrels of oil equivalent, according to the company’s website.
China Slowdown
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.
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 30.6, 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 Plc, told reporters today in Sydney.
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
