West Texas Intermediate oil fell for the fourth time in five days as OPEC said it expects weaker demand for its crude and U.S. output climbed to the highest in records dating to January 1983.
Demand for oil from the Organization of Petroleum Exporting Countries will average 28.8 million barrels a day, about 100,000 barrels less than forecast last month, the Vienna-based organization said in a monthly report. U.S. output surged to 9.19 million barrels a day last week, the Energy Information Administration reported yesterday.
Crude slid almost 50 percent last year, the most since the 2008 financial crisis, as OPEC resisted calls to cut its output ceiling amid the U.S. shale boom, exacerbating a global surplus. WTI crude will decline to $32 by the end of this quarter, Bank of America said.
“Nothing fundamental has changed,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “It’s going to take months before you see U.S. production slowing down. Any rally will be sold into.”
WTI for February delivery fell 51 cents, or 1.1 percent, to $47.97 a barrel at 11:51 a.m. on the New York Mercantile Exchange after climbing to $51.27. The contract advanced 5.6 percent yesterday, the most since June 2012. The volume of all futures traded was more than twice the 100-day average for the time of day.
Brent for February settlement, which expires today, fell 12 cents to $48.57 a barrel on the London-based ICE Futures Europe exchange. The more active March futures slid 7 cents to $49.79. Brent traded 60 cents above WTI on the ICE.
via Bloomberg 
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