(For Bloomberg fair value curves, see: CFVL <GO>)
Feb. 27 (Bloomberg) -- West Texas Intermediate traded near its lowest level this year. The Energy Department will probably report U.S. crude stockpiles rose to a seven-month high, according to a Bloomberg survey.
Futures slipped 0.3 percent, erasing an earlier gain. U.S. crude inventories climbed 2.5 million barrels, or 0.7 percent, to 378.9 million, a Bloomberg survey indicated. Iranian nuclear negotiator Saeed Jalili said talks with the U.S. and its partners will resume next month in Istanbul after discussions on the country’s atomic program concluded without agreement in Almaty, Kazakhstan.
“Price weakness is likely to continue in the short term” as the U.S. market is “well-supplied,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt.
WTI for April delivery was at $92.49, down 13 cents, as of 1:42 p.m. London time in electronic trading on the New York Mercantile Exchange. The volume of all futures traded was 27 percent below the 100-day average. The contract slid 48 cents, or 0.5 percent, to $92.63 yesterday, the lowest close since Dec. 31. Prices have gained 0.8 percent this year and declined 5.1 percent this month.
Brent for April settlement on the London-based ICE Futures Europe exchange was up 24 cents at $112.95 a barrel. The volume of all futures traded was 9.4 percent below the 100-day average for this time. The European benchmark crude was at a premium of $20.48 to WTI futures, compared with $20.08 yesterday.
Iran’s Jalili called the two-day session a “turning point” and said a more realistic and logical proposal was made to Iran. He didn’t give details. Technical talks will be held in Istanbul on March 18 and political discussions with the so- called P5+1 -- the U.S., U.K., France, Germany, China and Russia -- will resume in Almaty on April 5, Jalili told reporters.
“The result of the discussions is yet another example in a series of postponements,” said Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas SA in London. “Geopolitical tensions with Iran can easily flare up and boost the risk premium embedded in the oil price.”
The Energy Department’s statistics unit is scheduled to release its inventory report at 10:30 a.m. in Washington. It may show that gasoline stockpiles declined by 1 million barrels, according to a Bloomberg News survey.
Crude inventories climbed by 904,000 barrels last week to 373.4 million, the highest level since December, the American Petroleum Institute said yesterday.
WTI may rebound after the formation of a technical-reversal candlestick yesterday known as an “inverted hammer,” according to data compiled by Bloomberg. Futures also traded below the lower Bollinger Band for a fourth day before settling higher, signaling chart support where buy orders may be clustered. This indicator is around $92.43 a barrel today.
--With assistance from Yee Kai Pin and Ann Koh in Singapore and Ben Sharples in Melbourne. Editors: Bruce Stanley, Raj Rajendran