Oil traded near the lowest close in more than two months on estimates that U.S. crude stockpiles increased for a seventh week, prolonging the global surplus.
Futures fell 0.6 percent in New York Thursday, bringing the decline since Nov. 3 to almost 11 percent. Inventories probably increased by 1.3 million barrels last week, their longest run of gains since April, according to a Bloomberg survey before an Energy Information Administration report. Surplus oil inventories are at the highest level in at least a decade because of increased global production, according to the Organization of Petroleum Exporting Countries.
Oil has slumped about 44 percent the past year amid signs a global glut will persist as OPEC continues to pump more than its collective quota. Speeches from Federal Reserve officials including Chair Janet Yellen later Thursday may shed light on the likelihood of a December interest-rate increase, indicating their level of confidence in the economy and, in turn, the outlook for oil consumption.
“The prospects for a sustainable price recovery anytime soon look slim,” Kevin Norrish, managing director for commodities research at Barclays Plc in London, said in a report. “The key ingredient for change that is missing is any significant recovery in the global economy to boost commodity demand.”
West Texas Intermediate for December delivery was at $42.70 a barrel on the New York Mercantile Exchange, down 23 cents, at 12:12 p.m. London time. The contract lost $1.28 to $42.93 on Wednesday, the lowest close since Aug. 27. The volume of all futures traded was about 1.2 percent above the 100-day average.
Brent for December settlement, which expires Friday, was down 25 cents at $45.56 a barrel on the London-based ICE Futures Europe exchange. The more-active January contract was unchanged at $46.61. The European benchmark crude was at a premium of $2.91 to WTI.
U.S. crude stockpiles climbed to 482.8 million barrels through the week ended Oct. 30, the highest level since May, according to the EIA. The projected gain would keep supplies more than 100 million barrels above the five-year seasonal average. Refinery rates probably climbed by 0.5 percentage points to 89.2 percent of capacity in the week through Nov. 6, the Bloomberg survey showed before the government report Thursday.
Stockpiles in developed economies are 210 million barrels higher than their five-year average, exceeding the glut that accumulated in early 2009 after the financial crisis, OPEC said in a report. The current excess is bigger than the surplus of 180 million barrels to the five-year seasonal average that developed in the first quarter of 2009, the only other occasion in the past 10 years when it has topped 150 million barrels.
Cutting OPEC’s annual output by 1.6 percent would boost oil prices “significantly,” Ecuador’s President Rafael Correa said at a meeting in Riyadh, Saudi Arabia, according to a statement published in the president’s official gazette. The 12-member group pumped 32.2 million barrels a day in October, according to data compiled by Bloomberg. It’s due to meet in Vienna on Dec. 4 to discuss production.
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