Amaal oil fields in east Libya. The privatization of the industry is taking place after the counter-revolution against Col. Muammar Gaddafi., a photo by Pan-African News Wire File Photos on Flickr.
WTI Extends Biggest Loss in Two Months as Brent Drops on Libya
By Ben Sharples - Aug 21, 2013
West Texas Intermediate slid a third day after declining the most in two months yesterday amid speculation the Federal Reserve will taper economic stimulus. Brent declined in London as Libya prepared to open some oil ports closed by labor unrest.
Futures fell as much as 0.4 percent in New York before the Federal Open Market Committee publishes minutes of a July meeting today, with 65 percent of economists surveyed by Bloomberg predicting the Fed will taper bond purchases in September. The Libyan ports of Zueitina and Hariga are ready to resume exports, the oil ministry said yesterday. An Energy Information Administration report today may indicate U.S. crude stockpiles shrank by 1.5 million last week.
“There is some squaring of positions,” David Lennox, a resource analyst at Fat Prophets in Sydney, said by phone. The market is at the “back-end” of peak demand from the U.S. driving season, he said.
WTI for October delivery was at $104.80 a barrel, down 31 cents, in electronic trading on the New York Mercantile Exchange at 1:37 p.m. Singapore time. It fell as much as 38 cents. The volume of all futures traded was about 28 percent below the 100-day average. The September contract expired at $104.96 yesterday after losing 2 percent, the most since June 20.
Brent for October settlement slid 43 cents to $109.72 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $4.89 to WTI. The spread was $5.04 yesterday, the widest since June 28.
Fuel Supplies
Crude inventories dropped 1.2 million barrels in the week ended Aug. 16, the industry-funded American Petroleum Institute said yesterday, according to two people familiar with the report. U.S. gasoline stockpiles fell by 3.7 million barrels. Supplies probably dropped by 1.5 million barrels, according to the median estimate of analysts surveyed before today’s report from the EIA, the Energy Department’s statistical unit.
Distillate inventories, including heating oil and diesel, declined 1.8 million barrels, according to the API. They are projected to increase by 1 million barrels, the survey shows.
Refinery operating rates are expected to have decreased by 0.5 percentage point. U.S. refiners typically boost output to meet increased fuel demand during the so-called summer driving season from late May to early September.
Libyan Output
Libya prepared to open some oil ports as the government vied with guards for control of export facilities. The country’s navy said it would seize any tankers attempting illicit shipments.
Libya produced 800,000 barrels a day of crude last month, half the rate a year earlier, according to a Bloomberg survey of output from the 12-member Organization of Petroleum Exporting Countries. It holds Africa’s largest oil reserves.
WTI may rebound on technical support, data compiled by Bloomberg shows. Futures yesterday halted their decline near an upward-sloping trend line connecting the lows of June 24 and Aug. 8., which is at about $104.90 a barrel today. Buy orders tend to be clustered around chart-support levels.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
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