Brent crude fell amid rising oil supplies as a stronger dollar reduced commodities’ investment appeal. West Texas Intermediate also declined.
Both grades are headed a third monthly loss as ample supplies shielded the oil market from the U.S.-led military campaign against Islamic State. The Bloomberg Dollar Index rose to the highest since 2010 amid speculation the Federal Reserve will increase interest rates.
“Slow demand and more than ample supplies are the primary driver of this market,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The dollar pushing to a four-year high is adding to bearish factors.”
Brent (NYMEX:SCV14) for November settlement lost 59 cents, or 0.6 percent, to $96.41 a barrel at 9:13 a.m. New York time on the London-based ICE Futures Europe exchange. Prices are down 6.6 percent this month. The volume of all futures was 42 percent below the 100-day average.
WTI (NYMEX:CLV14) for November delivery slid 62 cents to $92.92 a barrel on the New York Mercantile Exchange. Volume was 25 percent below the 100-day average. Prices have retreated 3.1 percent this month. Brent’s premium to WTI shrank to as small as $3.20, the lowest since September 2013.
Both benchmarks are heading for their biggest quarterly loss in more than two years. Brent is down 14 percent in the past three months, while WTI has slipped 12 percent.
Gasoline futures climbed 0.8 percent to $2.6840 a gallon on the Nymex. Prices jumped 1.9 percent last week on concern refinery outages will reduce production.
U.S. crude production climbed to 8.87 million barrels a day in the week ended Sept. 19, the highest level since 1986, according to Energy Information Administration estimates. Rising U.S. output is pushing out imports. Crude oil shipments to the U.S. fell 1.24 million barrels a day to 6.87 million, the lowest level since May.
The International Energy Agency earlier this month cut its global oil demand forecast because of weaker growth in China and Europe. Higher exports from Libya and booming U.S. production “deepened the overhang in crude markets and overshadowed any lingering worries of potential output disruptions in Iraq,” the IEA said in a monthly report on Sept. 11.
Economic confidence within the euro area diminished in September, as an index of executive and consumer sentiment slipped to 99.9 from 100.6 a month earlier, the European Commission in Brussels said today. That’s the lowest since November and in line with the median of 25 forecasts in a Bloomberg News survey.
U.S. consumer spending increased 0.5 percent last month after little change in July, Commerce Department figures showed today. The median forecast of economists in a Bloomberg survey called for a 0.4 percent gain.
The Bloomberg dollar index climbed to as high as 1,070.26, up for a seventh day.
Aircraft from the U.S., Saudi Arabia and the United Arab Emirates attacked four modular refineries in Syria controlled by Islamic State over the weekend, U.S. Central Command said in an e-mailed statement yesterday. A command post north of Raqqah in Syria was attacked, while a safe house and checkpoints were destroyed in Iraq.
The U.S.-led campaign in Syria follows bombings in Iraq against Islamic State that started last month. The fighting has largely spared the south of Iraq, home to three quarters of oil output from the second-biggest producer in the Organization of Petroleum Exporting Countries.