West Texas Intermediate oil dropped from the highest level in a week before government data that is forecast to show crude stockpiles rose to a four-month high in the U.S., the world’s biggest consumer of the fuel.
Futures fell as much as 0.5 percent in New York, slipping for the first time in four days. U.S. crude inventories climbed for a sixth week, adding 2.7 million barrels in the period ended Oct. 25, according to a Bloomberg News survey before a report from the Energy Information Administration tomorrow. WTI’s discount to Brent oil widened yesterday after the European benchmark grade advanced as Libyan output was cut.
“Inventory builds in the U.S. are playing more of a part on what’s happening in the market,” said Jonathan Barratt, the chief executive officer of Barratt’s Bulletin in Sydney. “The WTI-Brent spread is starting to push out, and that’s got to do with Libya.”
WTI for December delivery slid as much as 46 cents to $98.22 a barrel in electronic trading on the New York Mercantile Exchange. It was at $98.30 at 11:58 a.m. Sydney time. The contract rose 0.9 percent to $98.68 yesterday, the highest close since Oct. 21. The volume of all futures traded was about 70 percent below the 100-day average.
Brent for December settlement fell as much as 51 cents, or 0.5 percent, to $109.10 a barrel on the London-based ICE Futures Europe exchange. It closed $2.68, or 2.5 percent, higher at $109.61 yesterday. The European benchmark crude was at a $10.88 premium to WTI, down from $10.93 the previous day.
Libya’s oil output dropped by half, or to about 250,000 to 300,000 barrels a day, as minority Tuareg nomads protesting for greater recognition halted crude flows from the Al-Sharara field, the state-run National Oil Corp. said yesterday. Output will resume during the next 24 hours, Libya News Agency said today, citing Oil Minister Abdulbari Al-Arusi.
In the U.S., gasoline stockpiles shrank 550,000 barrels last week, according to the median of eight analysts in the survey. The EIA is the Energy Department’s statistical arm.
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