WTI Oil Falls as Crude Supplies Seen Rising

West Texas Intermediate oil fell for a second day on speculation a report will show that U.S. crude supplies rose to the highest level in more than 22 years.

Futures declined as much as 1.2 percent before the release of government data tomorrow that’s projected to show stockpiles climbed by 1.75 million barrels last week, according to a Bloomberg survey of analysts. Exxon (XOM) Mobil Corp. is developing a plan to repair a leak that shut the Pegasus pipeline system, which moves oil to Gulf Coast refineries from the central U.S.

“There’s no doubt that there’s oil aplenty in the U.S.,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “The rise in U.S. oil output is changing the world energy picture dramatically. The only problem we have is shipping it from place to place, which is why we’re paying attention to the pipeline closure.”

WTI oil for May delivery dropped 84 cents, or 0.9 percent, to $96.23 a barrel at 9:42 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 27 percent above the 100-day average for the time of day.

Brent for May settlement decreased 48 cents, or 0.4 percent, to $110.60 a barrel on the London-based ICE Futures Europe exchange. The volume of all futures traded was 1.9 percent higher than the 100-day average.

The European benchmark grade traded at a $14.37 premium to WTI futures, compared with $14.01 yesterday and $12.79 March 28.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell