Oil is set for the lowest quarterly average price since the start of 2009 amid signs a glut of supplies is expanding in the world’s biggest consumer and OPEC producers are boosting output.
Futures lost as much as 1.2 percent New York after adding 1.8 percent Tuesday. U.S. inventories rose by 4.6 million barrels last week, the American Petroleum Institute was said to have reported. Government data due Wednesday will show supplies are unchanged at 454 million barrels, according to a Bloomberg survey. Iraq, OPEC’s second-biggest producer, boosted crude output 17 percent this month from a year earlier, Oil Minister Adel Abdul Mahdi said.
Oil has plunged more than a quarter from this year’s closing peak in June amid speculation a global glut that drove prices to a six-year low will be prolonged. U.S. crude stockpiles remain almost 100 million barrels above the five-year seasonal mean even as producers reduced output six out of the last seven weeks. The Organization of Petroleum Exporting Countries pumped more than its quota for the fifteenth straight month in August.
“Supplies are steadily increasing in the U.S. and a drop in oil prices is inevitable,” Will Yun, a commodities analyst at Hyundai Futures Corp., said by phone Wednesday. “Although OPEC will probably discuss whether to cut its output quota in December, it won’t happen this year.”
West Texas Intermediate for November delivery fell as much as 55 cents to $44.68 a barrel on the New York Mercantile Exchange and was at $44.74 at 11:27 a.m. Singapore time. The contract advanced 80 cents to $45.23 a barrel on Tuesday. The volume of all futures traded was about 58 percent below the 100- day average. Prices averaged $46.49 a barrel this quarter, the lowest since the three months ended March 2009.
U.S. Supplies
Brent for November settlement fell 41 cents, or 0.9 percent, to $47.82 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $3.08 to WTI. Prices have lost 17 percent this year.
Crude inventories at Cushing, Oklahoma, the delivery point for WTI contracts and the biggest oil-storage hub in the U.S., declined 1.2 million barrels, the API reported, according to multiple Twitter postings and a person familiar with the numbers.
Iraq this month raised its crude output to 3.912 million barrels a day, Mahdi said on his Facebook page. The Middle East producer accounted for about 4.6 percent of global output this month, compared to 3.6 percent a year ago. OPEC’s next scheduled meeting is for Dec. 4 in Vienna.
The Bloomberg Commodity Index, a measure of returns for 22 raw materials, has tumbled about 15 percent since June 30, and is headed for the worst quarter since the end of 2008.
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