Oil price slips back
Crude dropped below $45 a barrel before US government data forecast to show stockpiles expand in the world’s biggest oil consumer.
|||New York - Crude dropped below $45 a barrel before US government data forecast to show stockpiles expanded in the world’s biggest oil consumer.
Futures slid as much as 3.4 percent in New York, extending Tuesday’s 7.7 percent decline. Inventories probably increased by 900 000 barrels last week, according to a Bloomberg survey before a report from the Energy Information Administration Wednesday. Iran will boost output by 1 million barrels a day as sanctions on its exports are removed, Oil Minister Bijan Namdar Zanganeh said.
Oil has faltered after the biggest three-day rally in 25 years amid speculation a global glut that drove prices into a bear market will be prolonged. Crude will trade at $40 to $60 a barrel into 2016 as rising supplies overwhelm demand, according to Ian Taylor, chief executive officer of Vitol Group, the biggest independent oil trader.
“All eyes are on supplies to fall in order to balance the market,” Amrita Sen, chief oil analyst at London-based consultants Energy Aspects, said in a report. “Now if demand falls sharply due to a slowdown in China and emerging Asia, supplies will have to fall even further to rebalance the market.”
West Texas Intermediate for October delivery fell as much as $1.55 to $43.86 a barrel on the New York Mercantile Exchange and was at $44.38 at 11:10 am London time. The contract slipped $3.79 to $45.41 on Tuesday. The volume of all futures traded was 57 percent above the 100-day average. Prices have decreased 16 percent this year.
US supplies
Brent for October settlement dropped as much as $1.16, or 2.3 percent, to $48.40 a barrel on the London-based ICE Futures Europe exchange. It slid $4.59 to $49.56 on Tuesday. The European benchmark crude traded at a premium of $4.45 to WTI.
US crude stockpiles probably expanded to 451.7 million barrels last week, according to the median estimate of nine analysts surveyed by Bloomberg before the EIA report. That would keep supplies more than 90 million barrels above the five-year seasonal average.
Inventories rose by 7.6 million barrels through Aug. 28, the industry-funded American Petroleum Institute was said to have reported Tuesday. Supplies at Cushing, Oklahoma, the delivery point for WTI futures and the biggest US oil-storage hub, fell by 300 000 barrels, the API said.
Iran, the fourth-biggest producer in the Organization of Petroleum Exporting Countries, plans to pump 3.8 million to 3.9 million barrels of oil a day by March, Zanganeh said in an interview in Tehran. Output will rise by 500 000 barrels a day soon after sanctions are lifted and reach the 1 million-barrel target within the following five months, he said.
BLOOMBERG