“West Texas Intermediate slipped from near a five-week high amid rising crude inventories in the U.S., the world’s biggest consumer of the commodity.
Futures fell as much as 0.8 percent. Crude stockpiles advanced 3.7 million barrels last week, the American Petroleum Institute said yesterday. An Energy Department report today may show a gain of 1.3 million, according to a Bloomberg News survey. The euro fell to its weakest level since Nov. 21 against the dollar, undermining the appeal of commodities priced in the U.S. currency. Bank of America Corp. said front-month WTI contracts may start trading at a premium, a price structure known as backwardation.
“The crude inventory builds reported last night are weighing on prices,” said Robert Montefusco, a senior broker at Sucden Financial Ltd. in London, who earlier this month correctly predicted oil prices would decline. “The euro is getting bashed as Europe’s situation looks dire, which is also pressuring oil.”
WTI for May delivery dropped as much as 73 cents to $95.61 a barrel in electronic trading on theNew York Mercantile Exchange, trading for $95.62 at 11:35 a.m. London time. The volume of all futures traded was 17 percent below the 100-day average. The contract climbed $1.53 to $96.34 yesterday, the biggest increase since Dec. 26 and highest close since Feb. 19.
Brent for May settlement gained 18 cents to $109.54 a barrel on the London-based ICE Futures Europe exchange. The benchmark grade was at a premium of $13.91 to WTI after closing yesterday at $13.02, the narrowest settlement since July.
Technical Resistance
The euro fell against the dollar, declining 0.5 percent to $1.2779 at 11:39 a.m. London time. It dropped as low as $1.2773, the lowest level since Nov. 21.
West Texas Intermediate crude prices may shift this year into a so-called backwardated pattern, in which immediate supplies are more expensive than later deliveries, according to Bank of America.
The discount on front-month WTI futures has narrowed with the activation of the Seaway pipeline, which sends crude from the U.S. storage hub in Cushing, Oklahoma, to refineries on the country’s Gulf Coast, the bank said. The discount on front-month WTI was at 27 cents a barrel today.
