West Texas Intermediate fell for the third time in four days before a government report forecast to show U.S. crude stockpiles expanded and amid concern consumption in China may falter.
Futures in New York dropped as much as 1.5 percent as prices approached a technical level that signals gains may have been excessive. U.S. crude inventories increased for a sixth week to 363.6 million barrels, according to a Bloomberg News survey of analysts before Energy Information Administration data tomorrow. Equities in China, the world’s second-largest oil user, plunged the most since July on speculation a weaker property market will crimp growth.
“Prices have rallied further than perhaps the underlying supply-demand fundamentals would suggest,” said Hakan Kocayusufpasaoglu, chief investment officer at Archbridge Capital AG, a Zug, Switzerland-based hedge fund. “Demand growth is not phenomenally strong, and emerging markets, which have been the main driver of growth, are slowing down.”