“West Texas Intermediate traded near the lowest level in more than a week on forecasts that U.S. supplies climbed to the highest since at least 1931 amid production the IEA said is “transformative” for world markets.
Futures fell for a fourth day in New York on speculation that rising supplies will counter signs of an economic recovery. Crude inventories probably increased 450,000 barrels to 396 million in the week ended May 10, according to a Bloomberg News survey before Energy Department data tomorrow. Growth in North American production will be as significant for markets asChina’s economic boom, the International Energy Agency said.
“Supply-demand is skewed to the oversupply side,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark. “There is currently a lot of spare capacity and global crude overproduction. The multi-decade high in U.S. supply will keep weighing on WTI.”
WTI for June delivery was at $94.53 a barrel, down 64 cents, or 0.7 percent, in electronic trading on the New York Mercantile Exchange at 12:21 p.m. London time. The volume of all contracts traded was 5 percent above the 100-day average. Prices fell 87 cents to $95.17 yesterday, the lowest close since May 2.
Brent for June settlement on the London-based ICE Futures Europe exchange lost 74 cents and was at $102.08 a barrel. The European benchmark grade was at a premium of $7.40 to WTI futures. The spread was $7.65 yesterday, the narrowest based on closing prices since January 2011.