(For Bloomberg fair value curves, see CFVL <GO>)
Aug. 23 (Bloomberg) -- West Texas Intermediate headed for its biggest weekly decline in a month amid speculation refiner demand will slow with the passing of peak summer consumption in the U.S., the biggest crude consumer.
Futures were little changed, having lost 2.2 percent this week even as government data on Aug. 21 showed U.S. crude stockpiles shrank to the lowest level in about a year. Prices may extend losses next week as refiners begin to reduce operating rates, according to a Bloomberg News survey of analysts. Libya said it will resume exports from Brega, one of four ports closed by strikes, as protests there ease.
“I’m starting to think this is the high point for prices in the third quarter and we’re going to linger here a little before drifting down toward the fourth quarter,” said Bjarne Schieldrop, chief commodity analyst at SEB AB in Oslo. There is an “unusually large amount of refinery maintenance scheduled this autumn,” he said.
WTI for October delivery rose 13 cents to $105.16 a barrel in electronic trading on the New York Mercantile Exchange as of 1:21 p.m. London time. The volume of all futures traded was about 59 percent below the 100-day average. The contract increased 1.1 percent to $105.03 yesterday, the biggest gain since Aug. 9.
Brent for October settlement advanced 46 cents to $110.36 a barrel on the London-based ICE Futures Europe exchange, leaving the European benchmark crude at a premium of $5.23 to WTI futures, compared with $4.87 yesterday.
The restart of Libya’s Brega port may add about 90,000 barrels a day to the 500,000 a day that the holder of Africa’s biggest reserves currently exports via the Zawiya terminal and the offshore loading platforms of Mellitah, Al Jurf and Bouri. Es Sider, the nation’s largest port, Ras Lanuf and Zueitina remain closed since force majeure was declared on Aug. 18, according to state-run National Oil Corp.
U.S. crude stockpiles slid 1.4 million barrels last week to 359.1 million, according to the Energy Information Administration, the Energy Department’s statistical arm. That was the third weekly decrease.
Fuel consumption in July reached the highest level for the month in three years, according to the American Petroleum Institute. Total deliveries of petroleum products, a measure of demand, climbed 1.7 percent from a year earlier to 18.9 million barrels a day, the industry group said yesterday. Year-to-date consumption has averaged 18.6 million barrels a day, up 0.6 percent from 2012.
“The up-tick in demand is a reflection of the economy,” John Felmy, the chief economist at the API in Washington, said in a phone interview. “Although the overall economy remains weak, we are seeing positive signs of growth.”
WTI may drop next week on speculation that demand from refineries will slow with the end of the peak summer driving season, a Bloomberg survey shows. Twenty of 33 analysts and traders, or 61 percent, forecast futures will decline through Aug. 30. Seven respondents projected a gain and six said there would be no change. Last week, 54 percent in the survey said prices would fall.
--With assistance from Ben Sharples in Melbourne. Editors: Raj Rajendran, Justin Carrigan