(For Bloomberg fair value curves, see CFVL <GO>)
Dec. 12 (Bloomberg) -- West Texas Intermediate crude swung between gains and losses after falling the most in two weeks as distillate and gasoline inventories rose more than forecast in the U.S., the world’s largest oil consumer.
Futures were little changed in New York after declining 1.1 percent yesterday, the second drop in three days. Distillate inventories, including heating oil and diesel, climbed by 4.54 million barrels last week, the Energy Information Administration said yesterday. A Bloomberg News survey predicted a gain of 1.55 million. Crude supplies shrank for a second week, the EIA said.
“Product inventories are building as refineries boost runs,” said Andrey Kryuchenkov, an analyst at VTB Capital in London. “Crude is still plentiful.”
WTI for January delivery was at $97.70 a barrel in electronic trading on the New York Mercantile Exchange, up 25 cent, as of 1:32 p.m. London time. The contract lost $1.07 to close at $97.44 yesterday. The volume of all futures traded was about 32 percent below the 100-day average. Prices have gained 6.4 percent this year.
Brent for January settlement slid 19 cents to $109.51 a barrel on the London-based ICE Futures Europe exchange. The European benchmark was at a premium of $11.86 to WTI. The spread widened for the first time in three days yesterday to $12.26.
Crude inventories dropped by 10.59 million barrels in the seven days ended Dec. 6, said the EIA, the Energy Department’s statistical arm. That’s the biggest loss since Dec. 28 last year. Supplies were forecast to decline by 3 million, according to the median estimate of 10 analysts surveyed by Bloomberg. They’ve decreased by 16.2 million barrels in the past two weeks.
Stockpiles at Cushing, Oklahoma, the delivery point for WTI, rose by 625,000 barrels to 41.2 million, the highest level since July, the EIA data show.
Gasoline stockpiles climbed by 6.72 million barrels last week, according to the EIA, more than three times the increase projected in the Bloomberg News survey. Gasoline demand slid for a fifth week to 8.35 million barrels a day, according to the EIA. Refineries operated at an average 92.6 percent of capacity, the highest rate since July.
Distillate inventories in developed economies “are in line with one year ago but considerably lower than the five-year average,” the International Energy Agency said yesterday in its monthly oil market report.
“The reason for the decline in the WTI benchmark was higher-than-expected gasoline and distillate inventory builds,” Mark Pervan, the head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne, said in an e-mailed note today. “The increases suggest conversion rather than end- user utilization has been behind the draws in crude stocks across the last two weeks.”
Libya is producing about 250,000 barrels of crude a day, Oil Minister Abdulbari Al-Arusi said at press conference in Tripoli yesterday. That compares with more than 1 million barrels a day at the start of this year. Several ports that have been closed for four months may reopen on Dec. 15, provided an accord with local tribal leaders and renegade petroleum facility guards holds, government officials said yesterday.
--With assistance from Ben Sharples in Melbourne. Editors: Stephen Voss, Raj Rajendran