NEW YORK (Bloomberg) -- Oil resumed its drop after industry data showed U.S. stockpiles rose, keeping inventories at the highest seasonal level in at least 30 years as peak summer demand in the world’s largest consumer of the fuel nears its end.
Futures slid as much as 2.2% in New York after rising Tuesday. Supplies climbed by 4.46 MMbbl last week, the American Petroleum Institute was said to report. Government data Wednesday are forecast to show stockpiles fell as the nation’s summer driving season approaches its end on Labor Day, Sept. 5. Iran’s oil ministry said the country hasn’t yet decided whether to join informal OPEC talks next month in Algiers following a Reuters report that the nation had confirmed its attendance at the gathering.
Crude entered a bull market on Thursday less than three weeks after it tumbled into a bear market. Prices surged partly on speculation that informal discussions among members of the Organization of Petroleum Exporting Countries may lead to action to stabilize the market. Iraqi Oil Minister Jabbar Al-Luaibi has asked international companies to increase output to boost national revenue, according to a statement.
“The weekly oil stocks data from the API reported a huge crude oil stocks increase,” said Michael Poulsen, an analyst at Global Risk Management Ltd. “The crude oil build deviates big time from market consensus,” which had anticipated a stockpile decline.
West Texas Intermediate for October delivery fell as much as $1.05 to $47.05/bbl on the New York Mercantile Exchange and was at $47.08 at 12:34 p.m. in London. The contract rose 69 cents to close at $48.10 on Tuesday. Total volume traded was about 22% above the 100-day average.
U.S. Stockpiles
Brent for October settlement lost as much as 89 cents, or 1.8%, to $49.07/bbl on the London-based ICE Futures Europe exchange. Prices climbed 1.6% to $49.96 on Tuesday. The global benchmark crude traded at a $2.21 premium to WTI.
Prices jumped yesterday after Reuters reported that Iran is sending “positive signals” it may support joint action to bolster the oil market, citing unidentified people in OPEC and the oil industry. Iran hasn’t decided whether to join any action, according to the people. A spokesman for the country’s oil ministry on Wednesday told Bloomberg that Iran’s decision to attend the meeting in Algiers in September could be made as late as one day before the event.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, increased by 417,000 bbl, the API said, according to people familiar with the figures. Nationwide supplies probably dropped by 850,000 last week, according to the median analyst estimate in a Bloomberg survey. Inventories fell to 521.1 MMbbl through Aug. 12, according to EIA data.
