Diesel Tankers Depart Europe For Freezing U.S. East Coast
By Prejula Prem (Bloomberg) European refiners are planning to send more diesel than usual to the U.S., where inventories of the fuel are low and a cold snap has gripped...
By Ben Sharples
Oct. 14 (Bloomberg) — West Texas Intermediate extended its rout from the lowest price in 22 months amid speculation that rising U.S. stockpiles are exacerbating a global glut that’s driven prices into a bear market. Brent fell in London.
Futures dropped as much as 1.1 percent in New York, declining for the fifth time in six days. U.S. crude inventories probably expanded by 2.5 million barrels last week to 364.2 million, according to a Bloomberg News survey before a report from the Energy Information Administration on Oct. 16. That would be the highest level in two months.
Oil futures have collapsed into bear markets as shale supplies boost U.S. output to the highest level in almost 30 years amid signs of weakening global demand. The biggest producers in the Organization of Petroleum Exporting Countries are responding by cutting prices, sparking speculation that they will compete for market share rather than reduce supply.
“It’s up to OPEC to do something because the U.S. isn’t going to slow down production,” David Lennox, a resource analyst at Fat Prophets in Sydney, said by phone today. “The market is concerned with the supply-demand scenario.”
WTI for November delivery slid as much as 91 cents to $84.83 a barrel in electronic trading on the New York Mercantile Exchange and was at $85.17 at 11:55 a.m. Sydney time. The contract lost 8 cents to $85.74 yesterday, the lowest close since December 2012. The volume of all futures traded was about 17 percent above the 100-day average. Prices have decreased 13 percent this year.
Brent for November settlement fell as much as 79 cents, or 0.9 percent, to $88.10 a barrel on the London-based ICE Futures Europe exchange. It dropped $1.32 to $88.89 yesterday, the lowest since December 2010. The European benchmark crude traded at a premium of $3.10 to WTI, compared with $3.15 yesterday.
U.S. crude output increased to 8.88 million barrels a day in the week ended Oct. 3, the most since March 1986, according to the EIA. Gasoline and distillate inventories, which include heating oil and diesel, probably shrank last week, according to the median estimate in the Bloomberg survey of eight analysts before data from the Energy Department’s statistical arm.
Oil ministers from Kuwait and Algeria have dismissed possible production cuts as the price slump prompted Venezuela to call for an emergency OPEC meeting. The group, which supplies about 40 percent of the world’s crude, is scheduled to meet on Nov. 27 in Vienna.
OPEC is boosting output as its members fight for market share while seeking to meet increased domestic demand. The group pumped 30.47 million barrels a day in September, the most since August 2013, according to its monthly Oil Market Report published on Oct. 10.
(c) 2014 Bloomberg.
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