Brent crude fell for a third day amid signs that OPEC members are reluctant to reduce supply even as prices slumped deeper into a bear market. West Texas Intermediate dropped in New York.
Futures slid as much as 1% in London. The oversupply in global markets “didn’t come from us,” Energy Minister Suhail Al Mazrouei said yesterday of the United Arab Emirates and the Organization of Petroleum Exporting Countries. Crude stockpiles in the US, the world’s biggest oil consumer, probably increased by 1.1 million barrels through Nov. 7 for a sixth weekly gain, a Bloomberg News survey shows before government data tomorrow.
Brent has lost almost 30% since its June peak amid speculation that global supply is outpacing demand. Leading OPEC members are resisting calls to cut output and instead reducing export prices to the US, where they’re competing with the fastest pace of production in more than three decades. The group, which pumps an estimated 40 percent of the world’s oil, is scheduled to meet on Nov. 27 in Vienna.
“It’s all about OPEC at the moment,” Ric Spooner, a chief strategist at CMC Markets in Sydney, said by phone today. “The big move in prices means that this will be a meeting where the stakes are pretty high. The market view is that OPEC will not do anything, or do enough to have a material impact.”
Brent for December settlement declined as much as 85 cents to $80.82 a barrel on the London-based ICE Futures Europe exchange and was at $80.92 at 3:48 p.m. Singapore time. The contract, which expires tomorrow, closed at $81.67 yesterday, the lowest price since October 2010. The more-active January future was down 75 cents at $81.64 today. Front-month prices have decreased 27% this year.
WTI for December delivery dropped as much as 73 cents, or 0.9%, to $77.21 a barrel in electronic trading on the New York Mercantile Exchange. The volume of all futures was about 37% below the 100-day average. The U.S. benchmark crude was at a $3.62 discount to Brent for the same month. The spread closed at $3.73 yesterday, the narrowest in three weeks.
Saudi Arabia, OPEC’s largest producer, and Kuwait have signaled they’re unlikely to reduce output, while Libya, Venezuela and Ecuador have called for action to keep prices from falling further. The 12-member group is undecided on a production cut, Angola’s Deputy Oil Minister Anibal Octavio da Silva said yesterday in Acapulco, Mexico.
OPEC pumped 30.974 million barrels a day in October, data compiled by Bloomberg show. That exceeded its collective target of 30 million set in January 2012.
US crude inventories probably rose to 381.3 million barrels last week, the highest level since July, according to the median estimate in the Bloomberg survey of nine analysts before tomorrow’s report from the Energy Information Administration.
Gasoline stockpiles are projected to have climbed by 350,000 barrels, the survey shows. Distillate fuels, including heating oil and diesel, are forecast to have declined by 1.5 million.
The American Petroleum Institute in Washington is scheduled to publish separate supply data today. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, the Energy Department’s statistical arm.
Recommended for you
