Position: > 2016 > Home > News > Industry News >
NEW YORK (Bloomberg) -- West Texas Intermediate fell, snapping the longest rising streak since February as OPEC’s oil production was seen increasing to the highest level in a year. Brent was steady in London.
Futures dropped as much as 0.3% in New York, the first decline in five days. The Organization of Petroleum Exporting Countries boosted output by 891,000 bpd to 31 million in August, a Bloomberg survey shows. Iraqi forces entered the town of Amirli, ending a siege imposed by Islamic State militants that lasted for more than two months, a senior Shiite-Muslim cleric said. Floor trading in the U.S. will be closed for the Labor Day holiday on Sep. 1.
“It’s not a surprise given the rises we’ve seen over the last two trading sessions,” said Michael McCarthy, a Chief Strategist at CMC Markets in Sydney. “It’s been a pattern of trading globally for the last couple of weeks where we tend to reverse the position we saw in the previous U.S. session.”
WTI for October delivery slid as much as 25 cents to $95.71 a barrel in electronic trading on the New York Mercantile Exchange and was at $95.82 at Seoul time. Transactions will be booked from Sep. 2 for settlement purposes. The volume of all futures traded was about 57% below the 100-day average. Prices decreased 2.3% in August and are down 2.7% this year.
Brent for October settlement was 1 cent higher at $103.20 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $7.43 to WTI, compared with $7.23 on Aug. 29.
U.S. Economy
WTI climbed 2.5% last week, the first gain in more than a month, amid speculation that an improving U.S. economy will bolster fuel demand. The country will account for about 21% of global oil consumption this year, almost double that of China, the second-biggest user, forecasts from the International Energy Agency in Paris show.
China’s manufacturing expanded at a slower pace for August, joining weaker-than-projected credit, production and investment data in suggesting the economy is losing momentum. The government’s Purchasing Managers Index was at 51.1, missing the median estimate of 51.2 in a separate Bloomberg survey.
Nigeria, Saudi Arabia and Angola led production gains among OPEC members last month as new deposits came online, security improved and field maintenance programs ended, according to the Bloomberg survey of oil companies, producers and analysts. Iran and Venezuela were the only members to record reduced output.
Iraqi Supply
Iraq, the second-largest producer among OPEC’s 12 members, expanded output by 90,000 bpd to 3.09 million in August, the survey shows. The advance of Islamic State, a militant group, has spared the country’s south, home to about three-quarters of its production.
Seven Iraqi government troops and two members of the Kurdish forces known as the peshmerga were killed in the battle to free Amirli, said the health office in the northern city of Kirkuk. The offensive was preceded by U.S. air strikes on Islamic State positions. U.S., U.K., and Australian forces also delivered aid to the residents of the Shiite-dominated town.
Money managers increased net-long positions on WTI by 0.6% in the week ended Aug. 26, boosting bullish wagers from a 16-month low, according to data from the U.S. Commodity Futures Trading Commission.
In Ukraine, pro-Russia rebels attacked two coast-guard vessels just hours after European Union governments agreed to impose new sanctions on Russia, the world’s biggest energy exporter, if the conflict with its neighbor worsens.
While EU leaders disagreed over possible military assistance to Ukraine, they gave the European Commission a week to deliver proposals for sanctions that may target Russia’s energy and finance industries.