Oil extended losses from the lowest close in more than a month after weekly industry data showed U.S. crude stockpiles expanded, exacerbating an inventory glut.
Futures lost as much as 1 percent in New York after falling 6.1 percent the previous three sessions. Crude supplies rose by 9.3 million barrels last week, the American Petroleum Institute was said to report Tuesday. Government data Wednesday is also forecast to show stockpiles gained. OPEC members Libya and Nigeria are boosting output, providing a challenge to the group’s effort to finalize an agreement to curb production and stabilize prices.
Oil is continuing its retreat from near $50 a barrel, triggered by the failure of the Organization of Petroleum Exporting Countries’ to agree on country quotas Friday as part of implementing the group’s output deal. While Goldman Sachs Group Inc. sees little probability of an agreement at an official meeting on Nov. 30, Bank of America Merrill Lynch and OPEC’s head remain confident of a deal.
“What we’re seeing is the removal of any optimism for an OPEC deal,” said Michael McCarthy, chief market strategist in Sydney at CMC Markets. “There is an underlying weakness in the oil market. For West Texas, $45 to $48 looks to be the neutral pricing range.”
West Texas Intermediate for December delivery lost as much as 45 cents to $46.22 a barrel on the New York Mercantile Exchange, and was at $46.30 at 8:02 a.m. in London. The contract fell 19 cents to $46.67 on Tuesday, the lowest close since Sept. 27. Total volume traded was about 46 percent below the 100-day average. Prices dropped 2.9 percent last month.
U.S. Stockpiles
Brent for January settlement lost as much 38 cents, or 0.8 percent, to $47.76 a barrel on the London-based ICE Futures Europe exchange. The contract slid 47 cents, or 1 percent, to $48.14 a barrel on Tuesday. The global benchmark crude traded at a 98 cent premium to January WTI.
For a story on declining U.S. crude production, click here.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil storage hub, increased by 1.03 million barrels last week, the API said, according to people familiar with the data. Nationwide inventories probably rose by 2 million barrels, according to a Bloomberg survey before an Energy Information Administration report.
Colonial Pipeline Co. said it may resume service on its gasoline line at noon local time Saturday after an explosion and fire in Alabama sent futures surging. December gasoline rose as much as 15 percent Tuesday.
Oil-market news:
OPEC is likely to reach an agreement when it meets in November, Brazil’s Oil and Gas Secretary Marcio Felix said in Rio de Janeiro. Russia is hoping for a consensus between producers at the oil-output talks, Kremlin Spokesman Dmitry Peskov said on a conference call. Oil traders may find some profit by going to sea as crude prices continue to be dragged down by a global glut that shows no signs of abating.
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