WTI Crude Little Changed After First Drop in Four Days on Supply

By Ben Sharples

West Texas Intermediate crude fluctuated after the first drop in four days as industry data showed U.S. stockpiles climbed for a second week.

Futures were little changed in New York after declining 0.6 percent yesterday. Crude inventories rose by 680,000 barrels last week, the American Petroleum Institute said. An Energy Information Administration report today may show supplies gained 2 million barrels from the most in more than 82 years, according to a Bloomberg News survey. The EIA cut its WTI and Brent forecasts on rising supplies and lower global consumption. China boosted crude imports last month, according to customs data.

“The outlook is going to remain muted for the U.S. for consumption of oil,” said David Lennox, an analyst at Fat Prophets in Sydney. “There is also U.S. domestic supply, which continues to grow.”

WTI for June delivery was at $95.82 a barrel, up 20 cents, in electronic trading on the New York Mercantile Exchange at 12 p.m. Singapore time. The volume of all contracts traded was 22 percent below the 100-day average. Futures slid 54 cents to $95.62 yesterday, the lowest close since May 3.

Brent for June settlement dropped 2 cents to $104.38 a barrel on the London-based ICE Futures Europe exchange. The front-month European benchmark was at a premium of $8.56 to WTI futures, compared with $8.78 yesterday. It ended the session at $8.58 on May 3, the narrowest gap based on closing prices since December 2011.

China’s Crude Imports

WTI will average $93.17 a barrel this year, down 75 cents from the April projection of $93.92, the EIA, the Energy Department’s statistical arm, said yesterday in its monthly Short-Term Energy Outlook. Brent will average $105.89 a barrel in 2013, down $2.07 from last month’s prediction.

Oil production outside the Organization of Petroleum Exporting Countries will rise 2.1 percent to 53.85 million barrels a day in 2013, led by gains in the U.S. and Canada, the EIA said. The output projection was increased by 80,000 barrels from April’s report. U.S. production is projected to climb 14 percent to 7.42 million barrels a day.

OPEC members will produce 35.88 million barrels a day this year, the EIA said. Last month’s forecast was 35.98 million.

The administration lowered its outlook for global oil consumption to 89.93 million barrels a day from 90 million estimated last month.

U.S. Stockpiles

U.S. gasoline supplies fell by 186,000 barrels last week, the API data showed. They are projected to decline by 475,000 barrels in the EIA report, according to the median estimate of 12 analysts surveyed by Bloomberg. Distillate inventories, a category that includes heating oil and diesel, rose 1.1 million barrels. They are forecast to gain 500,000 barrels in the survey.

The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA for its weekly survey.

China’s net crude imports, or overseas purchases minus imports, rose to the highest level in three months in April, data from the Beijing-based General Administration of Customs showed today. Cargoes climbed to 5.62 million barrels a day, from 5.39 million a day in March. China is the world’s second- biggest oil consumer, accounting for 11 percent of the world’s demand in 2011, according to BP Plc (BP/)’s Statistical Review of World Energy.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

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