30 November 2013, London – West Texas Intermediate crude headed for a third monthly decline, the longest losing streak in almost five years, amid rising OPEC exports and increased supplies in the U.S., the world’s biggest oil consumer.
Futures rose as much as 0.6 percent in New York after falling 1.5 percent on Nov. 27, the most in two weeks. OPEC, which meets next week, will boost exports through mid-December by 3 percent as refineries resume after maintenance, according to tanker tracker Oil Movements. The U.S. pumped crude at the fastest rate in almost 25 years while inventories climbed to the highest since June, Energy Information Administration data released on Nov. 27 show.
“The momentum is negative in WTI,” said Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen. “U.S. production compared to just a year ago has continued to rise strongly. There still hasn’t been strong enough demand to neutralize the continued strong rise in production.”
WTI for January delivery was at $92.76 a barrel in electronic trading on the New York Mercantile Exchange, up 46 cents from its Nov. 27 close, as of 12:59 p.m. London time. Prices, down 3.7 percent in November, are set for the longest monthly slide since January 2009. Floor trading was suspended yesterday for the U.S. Thanksgiving holiday and electronic transactions will be booked today.
Brent for January settlement increased 8 cents to $110.94 a barrel on the London-based ICE Futures Europe exchange and is up 1.9 percent this month. The volume of all futures traded are 42 percent less than the 100-day average. The European benchmark grade was at a premium of $18.19 to WTI. The spread was $19.01 on Nov. 27, the widest in more than eight months based on closing prices.
The Organization of Petroleum Exporting Countries, which supplies about 40 percent of the world’s oil, will keep its crude production quota unchanged when it meets Dec. 4 in Vienna, according to 22 of 24 analysts and traders surveyed by Bloomberg News this week. The 12-member group set its output target two years ago at 30 million barrels a day.
OPEC will raise shipments by 700,000 barrels a day to 24.05 million barrels in the four weeks to Dec. 14, Halifax, England-based Oil Movements said in a report yesterday. That’s up from 23.35 million in the period through Nov. 16. The figures exclude Angola and Ecuador.
U.S. crude production increased by 45,000 barrels a day to 8.02 million in the seven days ended Nov. 22, the most since January 1989, according to data from the EIA, the Energy Department’s statistical arm.
Stockpiles at Cushing, Oklahoma, the largest U.S. oil-storage hub and delivery point for WTI contracts, have climbed to 40.6 million barrels, the highest level since July, it said. Total crude inventories nationwide were up 2.95 million barrels at 391.4 million, a 10th weekly gain.
WTI has long-term technical support along its 50-month moving average, according to data compiled by Bloomberg. This indicator, at $91.17 a barrel, is where futures halted monthly declines the last year and a half. Buy orders tend to be clustered around chart-support levels.
*Grant Smith, email@example.com