Brent oil headed for the longest run of weekly declines since January amid signs the global glut that’s driven prices lower will persist.
Futures were little changed in London, down 2.8 percent for a third weekly drop. U.S. crude stockpiles remain almost 100 million barrels above the five-year average for this time of the year, Energy Information Administration data shows. The specter of increasing Iranian output may still weigh on prices, even if the gain is gradual, according to Barclays Plc and Australia & New Zealand Banking Group Ltd.
Oil’s recovery from a six-year low has faltered amid speculation the surplus will be prolonged as U.S. drillers return rigs to fields and Iran seeks to regain market share. The full impact of higher Iranian exports won’t be felt until 2016 as the nuclear deal is implemented, banks including Goldman Sachs Group Inc. predict.
“There is a genuine focus back on the glut,” Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney, said by phone. “In the absence of solid economic data, it’s very hard to see prices going higher.”
Brent for September settlement was at $57.06 a barrel on the London-based ICE Futures Europe exchange, up 14 cents, at 2:42 p.m. Sydney time. The August contract expired Thursday after gaining 46 cents to $57.51. The European benchmark traded at a premium of $5.72 to West Texas Intermediate for September.
U.S. Supplies
WTI for August delivery was at $50.98 a barrel in electronic trading on the New York Mercantile Exchange, up 7 cents. The contract slid 50 cents to $50.91 on Thursday. The volume of all futures traded was about 30 percent below the 100- day average. Prices are 3.3 percent lower for the week.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI futures and the biggest oil-storage hub in the U.S., rose for a third week to 57.1 million barrels through July 10, the EIA said Wednesday. Nationwide supplies dropped for the first time in three weeks to 461.4 million barrels.
Iran, the fourth-biggest member of the Organization of Petroleum Exporting Countries, won’t achieve a crude-export boost of more than 500,000 barrels a day, or about 50 percent, until next year as the Islamic Republic’s compliance with curbs on its nuclear program is verified, according to banks including Goldman, Citigroup Inc. and Commerzbank AG.
Iran is unlikely to flood the market with oil, Mudher Saleh, economic adviser to Iraq Prime Minister Haider Al Abadi, said Wednesday. That would only cause prices to fall, which is not in anybody’s interest, he said.
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