Dubai: West Texas Intermediate (WTI) traded near the lowest closing price in seven months after speculators cut bullish bets and as supply rises in the US, the world’s biggest consumer. Brent was steady in London.
Futures were little changed in New York after falling 0.3% on Monday. Crude inventories probably shrank by 1.8 million barrels to 360.7 million last week, a Bloomberg survey shows before an Energy Information Administration report Wednesday. Stockpiles have risen to the highest level for this time of the year since 1990 amid increased US production. Money managers cut bullish bets on WTI by 14% in the week ended 19 August, Commodity Futures Trading Commission data show.
The focus on ample crude supply has been dominating the market, Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by phone. Now that net-long positions have come down again, that’s helping stabilize things.
WTI for October delivery was at $93.56 a barrel in electronic trading on the New York Mercantile Exchange, up 21 cents, at 11:18am London time. The contract slid 30 cents to $93.35 on Monday, the lowest close since 14 January. The volume of all futures traded was about 50% below the 100-day average. Prices have declined 4.9% this year.
Brent for October settlement was 15 cents higher at $102.80 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $9.26 to WTI. The spread closed at $9.30 on Monday, the widest since 14 March.
Speculators are the least bullish on US crude prices in 16 months. Net-longs for WTI slipped by 30,225 to 188,589 futures and options, the lowest level since the seven days ended 23 April 2013, CFTC data show. Bullish bets on Brent are at the lowest level in two years, data released on Monday by the ICE exchange show.
US crude production will reach 8.46 million barrels a day this year and 9.28 million in 2015, the highest annual average since 1972, according to the EIA, the Department of Energy’s statistical arm.
US gasoline inventories probably dropped by 1.73 million barrels in the week ended 22 August, according to the median estimate in the Bloomberg survey of eight analysts. Distillate stockpiles, including heating oil and diesel, are forecast to have decreased by 300,000 barrels, the survey shows.
The American Petroleum Institute in Washington is scheduled to release separate supply data on Tuesday. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA.
Crude stockpiles were at 362.5 million barrels through 15 August, the government data show. US production climbed to 8.5 million barrels a day in July, the most since April 1987, the EIA said in its monthly Short-Term Energy Outlook on 12 August.
Libya’s output dropped because of power outages at some fields, according to state-run National Oil Corp. Daily production fell to 630,000 barrels as of Monday, according to Mohamed Elharari, a spokesman at National Oil. The Waha field, which supplies Es Sider port, isn’t producing.
Iraq’s semi-autonomous Kurdistan Regional Government can bring $100 million of crude ashore in Texas after a US judge threw out a court order that would have required federal agents to seize and hold the cargo for the Iraqi oil ministry until a court there decided which government owns it.
Acceptance of Kurdish crude by international buyers and by the country’s central government would boost the nation’s total exports by about 12%, according to Julian Lee, a strategist at Bloomberg First Word whose views are his own. Bloomberg