(For Bloomberg fair value curves, see CFVL <GO>)
Oct. 21 (Bloomberg) -- West Texas Intermediate fell below $100 a barrel for the first time since July amid forecasts that crude stockpiles increased to a three-month high in the U.S., the world’s biggest oil consumer.
Futures declined as much as 1.2 percent, after losing 1.2 percent last week. U.S. crude inventories probably climbed by 3 million barrels to 373.5 million in the week ended Oct. 11, a Bloomberg News survey before a government report today showed. That would be the highest level since July. A Nigerian rebel group said it plans to escalate a violent campaign of disrupting oil production by targeting offshore fields.
“One hundred is something of a psychological mark,” said Gerrit Zambo, an oil trader at Bayerische Landesbank in Munich. “We still have a bearish outlook due to the increasing production in the U.S. Demand is not expected to rise dramatically.”
WTI for November delivery, which expires tomorrow, dropped as much as $1.17 to $99.64 a barrel in electronic trading on the New York Mercantile Exchange, and traded for $99.78 at 1 p.m. London time. The more-actively traded December contract slid 98 cents to $100.13. The volume of all futures traded was about 3 percent less than the 100-day average.
Brent for December settlement was down 47 cents at $109.47 a barrel on the London-based ICE Futures Europe exchange. The front-month European benchmark was at a premium of $9.36 to WTI. The spread was $8.83 on Oct. 18, the widest in a week.
Global oil markets are adequately supplied, and prices in a range of $100 to $110 a barrel are suitable for consumers and producers, Abdalla El-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said at a conference today in Muscat, Oman.
“There’s a lot working against the bulls,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “We are looking at rising inventories in the U.S., and there were positive indications coming out of the Iranian talks in Geneva.”
U.S. and European diplomats described negotiations held on Oct. 15-16 in Geneva to resolve differences over Iran’s nuclear program as detailed and substantive. International sanctions on Iran have hobbled the nation’s oil exports and the financial system supporting them.
The Energy Information Administration, the Energy Department’s statistical arm, postponed the release of its Weekly Petroleum Status Report last week after the partial U.S. government shutdown on Oct. 1 led to the agency closing. The report is scheduled for release today in Washington at 10:30 a.m. local time.
Gasoline stockpiles probably fell by 1 million barrels, according to the median estimate of nine analysts surveyed by Bloomberg. Distillate inventories, including heating oil and diesel, are projected to have declined by 2 million.
“We’ll move back toward more oil-specific drivers of the market and so the inventory numbers will be more important,” said Michael McCarthy, a chief market strategist at CMC Markets in Sydney. “In the short term, the market may move down to see if the real support will hold” at $98 to $99, he said.
Offshore oil operations in Nigeria, Africa’s largest producer, “are not a safe haven,” the Movement for the Emancipation of The Niger Delta said by e-mail yesterday. The rebel group has attacked oil facilities since April.
Kidnappings and sabotage bombings cut crude output in Nigeria, an OPEC member nation, by more than 28 percent from 2006 to 2009, according to data compiled by Bloomberg.
OPEC’s biggest member, Saudi Arabia, pumped more crude in August than Russia, the world’s largest producer, and boosted exports to the highest level in 14 months, according to the Joint Organizations Data Initiative.
Saudi Arabia produced 10.2 million barrels a day in the month, up 160,000 from July, and shipped 7.8 million, the most since June 2012, data on JODI’s website showed yesterday. Russia pumped 10.1 million barrels a day in August.
--With assistance from Robert Tuttle in Doha, Ann Koh in Singapore and Mark Shenk in New York. Editors: Raj Rajendran, Rachel Graham