West Texas Intermediate and Brent crudes headed for the biggest quarterly decline in more than two years as ample supply shielded the market from the risk of disruption from conflict in the Middle East.
Futures slid as much as 3.8 percent in New York today and 3.1 percent in London. U.S. crude stockpiles probably expanded by 1.5 million barrels last week, a Bloomberg News survey showed before an Energy Information Administration report tomorrow. Prices also dropped as a dollar index strengthened to a four-year high, reducing the investment appeal of commodities.
“We are going to continue to see lower prices as we go forward,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “Fundamentally we are just very well supplied. The dollar continues to get stronger and it’s adding pressure to oil.”
WTI for November delivery fell $3.01, or 3.2 percent, to $91.56 a barrel at 11:58 a.m. on the New York Mercantile Exchange. Prices have lost 13 percent this quarter, the most since June 2012. The volume of all futures was 51 percent above the 100-day average.
Brent for November settlement slid $2.32, or 2.4 percent, to $94.88 a barrel on the London-based ICE Futures Europe exchange. Volume was 11 percent above the 100-day average. Prices have decreased 16 percent this quarter. WTI was at a discount of $3.17 to Brent on ICE, compared with $2.63 yesterday, which was the narrowest close since August 2013.