WTI holds above $90 before U.S. fuel supply data; brent steady

2014-10-07 11:12:58

West Texas Intermediate held gains to trade above $90 a barrel before stockpile data that will signal the strength of fuel demand in the U.S., the world’s biggest oil consumer. Brent was steady in London.

Futures were little changed in New York after rising 0.7 percent yesterday, the most since Sept. 29. Crude inventories expanded by 2 million barrels last week, while distillate and gasoline supplies shrank, a Bloomberg News survey shows before government data tomorrow. Prices slid below $90 in intraday trading in each of the past three days amid speculation that global oil supply is outpacing demand.

“Increasing supply around the globe continues to weigh on the energy complex,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “Even though the leaning is toward further weakness, it will take something fairly dramatic to push oil through that floor at about $88.50.”

WTI for November delivery was at $90.32 a barrel in electronic trading on the New York Mercantile Exchange, down 2 cents, at 2:52 p.m. Singapore time. The contract climbed 60 cents to $90.34 yesterday. The volume of all futures traded was about 34 percent below the 100-day average. Prices have decreased 8.2 percent this year.

Brent for November settlement was 6 cents lower at $92.73 a barrel on the London-based ICE Futures Europe exchange. It advanced 48 cents yesterday, snapping a four-day losing streak. The European benchmark crude traded at a $2.43 premium to WTI.

Fuel Supplies

WTI declined 4.1 percent last week, the most in two months, as Saudi Arabia cut prices for November exports to Asia while the Organization of Petroleum Exporting Countries increased production in September. The 12-member group pumps about 40 percent of the world’s crude.

U.S. distillate inventories, including heating oil and diesel, probably fell by 1.5 million barrels in the week ended Oct. 3, according to the median estimate in the Bloomberg survey of seven analysts before an Energy Information Administration report. Gasoline supplies are forecast to have slid 500,000 barrels for a fourth weekly drop.

The American Petroleum Institute in Washington is scheduled to release separate data today. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines, while the government requires that reports be filed with the EIA, the Energy Department’s statistical arm.

Brent’s 14-day relative strength index is at about 27 today, data compiled by Bloomberg show. That’s a sixth day below 30, signaling the market is oversold and further losses probably can’t be sustained.