Crude was poised to end the month below $50 a barrel for the fourth time amid a global glut that’s showing no signs of relief for oil and gas companies that posted more than $19 billion in writedowns in a single week.
Futures slid as much as 1.3 percent in New York. Output from Iraq, the second-biggest OPEC producer, exceeds 4 million barrels a day, Oil Minister Adel Abdul Mahdi said, according to the Almada news website.
US crude stockpiles rose for a fifth week through Oct. 23, keeping supplies more than 100 million barrels above the five-year seasonal average, government data showed Wednesday.
Oil failed to sustain a gain above $50 a barrel earlier this month as the Organization of Petroleum Exporting Countries pumps above its quota and the International Energy Agency estimates the surplus will remain until at least the middle of 2016. Royal Dutch Shell Plc announced its worst loss in 16 years on Thursday, including $8.2 billion in impairments.
“It’s taking time for the market to rebalance,” said Antoine Halff, a senior fellow at the Center on Global Energy Policy at Columbia University. “There are pockets of demand strength, but they’re not enough to move the needle in a big way. There’s pressure on shale production, but it will take time.”
West Texas Intermediate for December delivery fell as much as 58 cents to $45.48 a barrel on the New York Mercantile Exchange and was at $45.92 at 9:55 a.m. London time. The contract gained 12 cents to $46.06 on Thursday. Prices are up 3 percent this week and 1.9 percent higher for the month.
Brent for December settlement rose 18 cents to $48.98 a barrel on the London-based ICE Futures Europe exchange. It dropped 25 cents to $48.80 on Thursday. The European benchmark crude traded at a premium of $2.94 to WTI.
Shell leads the pack in recognizing that drilling prospects are worth a lot less than they used to, after announcing $8.2 billion in impairments on Thursday. Southwestern Energy Co., Whiting Petroleum Corp. and Anadarko Petroleum Corp. have likewise written off acreage value.
Iran may roil global oil markets with plans to sell about 45 million barrels of fuel stored in tankers in the Persian Gulf within three months of the removal of sanctions on its economy, according to analysts. The OPEC producer is seeking to claw back the market share it lost under sanctions by boosting exports after a July deal with world powers to return to energy and financial markets.