(Updates prices in sixth paragraph.)
Nov. 1 (Bloomberg) -- West Texas Intermediate crude will probably drop next week following a government report that U.S. inventories surged to a four-month high, according to a Bloomberg survey.
Twenty of 29 analysts, or 69 percent, forecast crude will decrease through Nov. 8. Seven respondents, or 24 percent, said there will be a gain and two projected little change. Last week, 68 percent of analysts projected a decline.
U.S. crude supplies rose 4.09 million barrels to 383.9 million in the seven days ended Oct. 25, the highest level since June 21, the Energy Information Administration said Oct. 30. Crude output fell 43,000 barrels a day from a 24-year high of 7.9 million. Refineries have operated at less than 90 percent of capacity since Sept. 20.
“I’m looking for oil to trade lower next week,” Tom Power, senior commodities broker at RJO Futures in Chicago, said yesterday. “Production continues to increase, while at the same time, demand remains weak. And the economic data we are receiving hasn’t been particularly supportive of higher prices.”
U.S. data yesterday showing the biggest jump in a gauge of business activity in more than three decades and a drop in jobless claims added to speculation the Federal Reserve will consider tapering stimulus. The Fed maintained its $85 billion in monthly bond purchases on Oct. 30.
Front-month crude futures dropped $3.24, or 3.3 percent, to $94.61 a barrel this week on the New York Mercantile Exchange. Today’s settlement was the lowest since June 21. Prices fell 5.8 percent in October and are up 3 percent this year.
The oil survey has correctly predicted the direction of futures 50 percent of the time since its start in April 2004.
Bloomberg’s survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:
RISE NEUTRAL FALL
7 2 20
--With assistance from Grant Smith in London, Ramsey Al-Rikabi, Yee Kai Pin and Ann Koh in Singapore, Ben Sharples in Melbourne and Sarah Chen in Beijing. Editors: Charlotte Porter, Margot Habiby