Large Inventories Continue to put Pressure on Oil Prices

West Texas Intermediate traded near the lowest closing price in seven months after speculators cut bullish bets and as supply rises in the U.S., the world’s biggest consumer. Brent was steady in London.

Futures were little changed in New York after falling 0.3 percent yesterday. Crude inventories probably shrank by 1.8 million barrels to 360.7 million last week, a Bloomberg survey shows before an Energy Information Administration report tomorrow. Stockpiles have risen to the highest level for this time of the year since 1990 amid increased U.S. production. Money managers cut bullish bets on WTI by 14 percent in the week ended Aug. 19, Commodity Futures Trading Commission data show.

“The focus on ample crude supply has been dominating the market,” Ole Hansen, head of commodity strategy at Saxo Bank A/S in Copenhagen, said by phone. “Now that net-long positions have come down again, that’s helping stabilize things.”

WTI for October delivery was at $93.63 a barrel in electronic trading on the New York Mercantile Exchange, up 28 cents, at 1:52 p.m. London time. The contract slid 30 cents to $93.35 yesterday, the lowest close since Jan. 14. The volume of all futures traded was about 43 percent below the 100-day average. Prices have declined 4.7 percent this year.

Brent for October settlement was unchanged at $102.65 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $9.01 to WTI. The spread closed at $9.30 yesterday, the widest since March 14.

via Bloomberg

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