Brent and West Texas Intermediate headed for the biggest quarterly decline in more than two years amid speculation that rising crude output would buffer the market from potential supply disruptions in the Middle East.
Futures slid as much as 0.2 percent in London and are down 13 percent from the beginning of July. The U.S. and its European and Arab allies have conducted thousands of air missions since starting a bombing campaign to counter Islamic State militants in Syria and Iraq, OPEC’s second-largest producer. U.S. crude stockpiles probably expanded by 1.5 million barrels last week, a Bloomberg News survey shows before an Energy Information Administration report tomorrow.
“Compared with 2011 and 2012 when we had issues with Libya and Iran, which resulted in a sharp rise in oil prices, we’re quite stable now despite the geopolitical conflicts,” Hong Sung Ki, a senior commodities analyst at Samsung Futures Inc. in Seoul, said by phone today. “The biggest difference between now and then is the increasing crude production in the U.S.”