(For Bloomberg fair value curves, see CFVL <GO>)
April 30 (Bloomberg) -- West Texas Intermediate headed for its biggest monthly loss since November on signs that crude inventories increased from an 83-year high in the U.S., the world’s biggest oil consumer. Brent slid as President Putin cautioned against further sanctions on Russia over Ukraine.
Futures dropped as much as 1.3 percent in New York, declining for the first time in three days. Crude stockpiles probably increased by 2.2 million barrels to 399.9 million last week, according to a Bloomberg News survey before government data today. Supplies rose by 3 million, an industry report showed yesterday. Brent is poised for a rebound in April as sanctions on Russia were strengthened over the Ukraine crisis and gunmen opened fire at Libya’s parliament.
“The market is still oversupplied and that is weighing on WTI,” Andy Sommer, an analyst at Axpo Trading AG in Dietikon, Switzerland, said by phone. “Shale production is still rising fairly sharply and U.S. demand has slipped.”
WTI for June delivery fell as much as $1.27 to $100.01 a barrel in electronic trading on the New York Mercantile Exchange and was at $100.10 at 12:23 p.m. London time. The contract advanced 44 cents to $101.28 yesterday. The volume of all futures traded was about 18 percent above the 100-day average for the time of day. Prices are down 1.5 percent in April, the most in five months.
Brent for June settlement decreased as much as 77 cents, or 0.7 percent, to $108.21 on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $8.30 to WTI on ICE, compared with $6.18 at the end of March.
U.S. crude inventories have climbed to the highest level since May 1931, monthly government data going back to 1920 show. Reports before 1976 were based on Bureau of Mines figures, according to the Energy Information Administration, the Energy Department’s statistical arm. Alaskan crude in transit was included from 1981.
Crude stockpiles at Cushing, Oklahoma, the largest oil- storage hub in the U.S. and the delivery point for New York futures, increased by 202,000 barrels last week, the American Petroleum Institute in Washington said yesterday.
Gasoline supplies probably shrank by 900,000 barrels in the week ended April 25, according to the median estimate in the Bloomberg survey of nine analysts before today’s EIA report. Distillate inventories, including heating oil and diesel, rose by 500,000 barrels, the survey shows.
Russian President Vladimir Putin warned that further economic sanctions over tension in Ukraine may lead his nation to reconsider participation by U.S. and European Union companies in energy and other industries.
The EU and the U.S. say Russia hasn’t lived up to an accord signed April 17 in Geneva intended to defuse the confrontation between the Ukrainian government and separatists supported by the authorities in Moscow. They’ve warned that penalties will be levied on Russian industries if Putin escalates by sending troops into Ukraine.
“Market participants expect some kind of relaxing of the situation” in Ukraine, said Axpo’s Sommer. “I see a bit of downside in Brent, of $3 to $5, if Ukraine doesn’t worsen, if Libya really comes back. But still the situation is far from being stable” in the North African country, he said.
In Libya, a vote on the premiership was suspended after unidentified gunmen opened fire at the parliament. About 25 armed protesters attempted to storm the building, firing at windows after they were blocked by guards, according to Mohammed Ali Abdullah, a lawmaker. Libya, a member of the Organization of Petroleum Exporting Countries, is the holder of Africa’s biggest crude reserves.