WTI Crude Declines in Survey With Stockpiles Seen as Ample

Dec 20, 2013 3:48 pm ET

(Updates prices in seventh paragraph.)

Dec. 20 (Bloomberg) -- West Texas Intermediate crude will probably decline next week amid ample U.S. inventories and reduced stimulus, according to a Bloomberg survey.

Fifteen of 32 analysts, or 47 percent, forecast crude will decrease through Dec. 27. Eleven respondents, or 34 percent, projected prices will be little changed, and six said oil will rise. Last week, 52 percent of analysts projected a slip.

U.S. crude supplies grew to 391.4 million barrels in the week ended Nov. 22, the highest level since June, according to Energy Information Administration data. Stockpiles fell 2.94 million barrels last week to 372.3 million, the EIA said in a Dec. 18 report. Inventories slid in nine of the past 10 Decembers as companies in Gulf Coast states delayed imports and cut year-end supplies to reduce local taxes.

“Despite a drawdown in inventories, I think the supply remains adequate to meet the current demand,” Tom Power, senior commodities broker at RJO Futures in Chicago, said yesterday. “I’m also looking for increased volatility as we move through the holidays and traders place more of an emphasis on near-term economic data leading up to the next FOMC meeting in January.”

The Federal Reserve Open Market Committee said on Dec. 18 that it will reduce stimulus as the nation’s economic outlook improves, slowing monetary stimulus to $75 billion a month from $85 billion.

U.S. crude production climbed to 8.08 million barrels a day in the week ended Dec. 6, the most since October 1988, according to the EIA, the Energy Department’s statistical arm. Output sank last week by 0.2 percent to 8.06 million.

Front-month crude futures rose $2.72, or 2.8 percent, to $99.32 a barrel this week on the New York Mercantile Exchange. Today’’s settlement was the highest since Oct. 18. Prices are up 8.2 percent this year.

The oil survey has correctly predicted the direction of futures 51 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
                      6         11        15

--With assistance from Grant Smith in London, Yee Kai Pin, Ramsey Al-Rikabi, Ann Koh and Winnie Zhu in Singapore and Ben Sharples in Melbourne. Editors: Charlotte Porter, Dan Stets