WTI Slips for Ninth Day After Cushing Supply Gain; Brent Drops

Jul 09, 2014 10:39 am ET

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July 9 (Bloomberg) -- West Texas Intermediate crude fell for a ninth day, the longest stretch of decreases since 2009, after supplies rose at Cushing, Oklahoma, the contract’s delivery point. Brent slipped to a one-month low amid signs Libyan oil exports will gain.

Cushing stockpiles rose by 447,000 barrels to 20.9 million last week, Energy Information Administration data showed. Total inventories dropped 2.37 million barrels to 382.6 million, in line with the 2.5 million-barrel U.S. supply drop projected by analysts surveyed by Bloomberg. Libya plans to gradually boost exports to avoid disrupting the market, said Samir Kamal, the nation’s governor to the Organization of Petroleum Exporting Countries.

WTI for August delivery dropped 86 cents, or 0.8 percent, to $102.54 a barrel at 10:35 a.m. on the New York Mercantile Exchange. It traded at $102.59 before the release of the report at 10:30 a.m. in Washington. Futures touched $102.40, the lowest level since June 6. Prices have risen 4.2 percent this year.

Brent for August settlement fell 58 cents, or 0.5 percent, to $108.36 a barrel on the London-based ICE Futures Europe exchange. The contract touched $108.27, the lowest level since June 5. It’s erased gains made since early June when Islamic militants seized the northern Iraqi city of Mosul.

The European benchmark grade traded at a $5.82 premium to WTI. The spread dropped to $5.54 at yesterday’s close, the narrowest since June 10.

Production Rises

Crude stockpiles rose to 399.4 million barrels in the week ended April 25, the most since the EIA began publishing weekly data in 1982.

U.S. crude production increased 72,000 barrels a day to 8.514 million. Output has surged this year as a combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies trapped in shale formations, including the Bakken in North Dakota and the Eagle Ford in Texas.

Gasoline stockpiles rose 579,000 barrels to 214.3 million. A 400,000-barrel decline was projected, according to the median of nine analyst responses in the Bloomberg survey.

Refineries operated at 91.6 percent of capacity last week, up 0.2 percentage points from the prior week.

Libya has 7.5 million barrels of oil stored at the ports of Es Sider and Ras Lanuf after lifting force majeure, Oil Ministry Measurement Director Ibrahim Al-Awami said by phone on June 7. Production was 327,000 barrels yesterday, National Oil Corp. spokesman Mohamed Elharari said by phone. The country has slipped to being the smallest producer in OPEC as political protests cripple its output.

“The Libyan announcement is putting pressure on both Brent and WTI,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York.

Iraq’s south, home to more than three-quarters of its crude output, remained unaffected by fighting between government forces and insurgents from a breakaway al-Qaeda group known as the Islamic State. The country is the second-largest producer in OPEC, data compiled by Bloomberg show.