Crude Oil Drops From One-Week High on Forecast U.S. Stockpiles Increased
Oil dropped from the highest close in more than a week before a report forecast to show that crude and gasoline stockpiles increased in the U.S.
Futures slipped as much as 1 percent, the first decline in three days, after failing to settle above $100 a barrel yesterday. A U.S. Energy Department report tomorrow will probably show oil inventories rose for the first time in a month, while gasoline supplies climbed for a third week, according to a Bloomberg News survey.
“We’ve had more positioning in oil recently with the speculators coming in on the long side,” said Michael McCarthy, a chief market strategist at CMC Markets Asia Pacific Pty. in Sydney who sees technical resistance for New York crude at $102. “When we get moves as we’ve seen overnight, the short-term interest is simply taking profit.”
Futures for January delivery fell as much as 98 cents to $97.23 a barrel in electronic trading on the New York Mercantile and were at $97.45 at 4:04 p.m. Singapore time. The contract rallied as much as 4.1 percent to $100.74 yesterday on signs of economic recovery in the U.S. and possible supply disruptions in the Middle East, before closing at $98.21, the highest since Nov. 17. Prices are up 14 percent from a year ago.
Brent oil for January settlement was at $108.72 a barrel, down 28 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $11.27, compared with $10.79 yesterday and a record $27.88 on Oct. 14.
West Texas Intermediate crude will struggle to remain above $100 a barrel, according to a Commerzbank AG report yesterday. Futures are unlikely to advance much further after an “emphatic rejection” from $103.39, the intraday high on May 31, said London-based technical analyst Karen Jones, who earlier this month correctly forecast that Brent oil would fall below $110. WTI rose as high as $103.37 on Nov. 17 before ending the day below $99 a barrel.
U.S. crude inventories probably climbed 1 million barrels last week, according to the median of seven analyst estimates in a Bloomberg News survey. Gasoline supplies may have increased 1.1 million barrels, the survey showed. The Energy Department is scheduled to release its report tomorrow in Washington.
The American Petroleum Institute will release its inventory report today. 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 Energy Department for its weekly survey.
The Organization of Petroleum Exporting Countries may keep oil production quotas at current levels when it meets next month, Ecuador’s Non-Renewable Natural Resources Minister Wilson Pastor said yesterday. The group is scheduled to meet in Vienna for an annual conference on Dec. 14.
Venezuela is seeking to maintain current OPEC quotas, Oil Minister Rafael Ramirez said yesterday. Member countries exceeding the limit should lower their output, he said. The group’s 12 members are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.
Money managers included hedge-funds reduced bullish bets on oil for the week ended Nov. 22, according to data released yesterday by ICE Futures Europe and the Commodity Futures Trading Commission.
Managers cut bullish bets on Brent crude by 5,356 contracts in the week ended Nov. 22, London-based ICE said yesterday in its weekly Commitment of Traders report. Net-long bets on WTI fell by 26,387, or 12 percent, to 189,688, CFTC data showed. It was the largest drop since the week ended Aug. 2.
Why Spencer Ogden
We’ve won awards for what we do
Proactive, professional and passionate about recruitment is how we do it. Our Graduate Academy is an intensive training ground for the world’s top graduates. Thanks to the know-how of leading managers and directors, we turn them into the best recruitment professionals in the industry.Join our team