LONDON: Oil headed for its first weekly decline in more than a month as rising US stockpiles and Opec production cushioned the impact of declines in North American output.
Futures slid as much as 1.6 per cent in New York and are down about 4.6 per cent this week. US inventories rose to the highest since 1929 while production slid the most in eight months last week, government data showed Wednesday. Canada’s supplies are sufficient to cover production losses from fires in the country’s oil-sands region, Genscape said. Opec output climbed in April amid gains from Iran and Iraq, according to data compiled by Bloomberg.
Oil has rebounded after slumping to the lowest since 2003 earlier this year amid signs the global glut will ease as US output declines. The nation’s stockpiles swelled to 543.4 million barrels last week, according to the Energy Information Administration. Citigroup Inc predicts inventories will expand further to a record before starting a seasonal slide.
“The oil price rally is faltering,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. While “most of the interruptions to production are unlikely to be lasting,” the limited price reaction still “marks a shift in sentiment on the oil market which could also weigh further on prices in the near future.”
West Texas Intermediate for June delivery lost as much as 72 cents to $43.60 a barrel on the New York Mercantile Exchange and was at $43.78 at 1.21pm. London time. The contract gained 54 cents to $44.32 on Thursday. Total volume traded was about 19 per cent above the 100-day average.
Canada Fires
Brent for July colony fell as much as 79 cents, or 1.8 per cent, to $44.22 a barrel on the London-based ICE Futures Europe exchange. The contract gained 39 cents to $45.01 on Thursday. Prices are down about 7.7 per cent this week. The global benchmark was at a premium of 4 cents to WTI for July.
Suncor Energy Inc, Royal Dutch Shell Plc and Husky Energy Inc are among companies that shut plants or reduced output because of the wildfires in Canada. Between 900,000 and 1 million barrels a day of production may be offline because of the blaze, equal to 35 to 38 per cent of the 2.6 million barrels a day of average output forecast for this year, Royal Bank of Canada said in a report Thursday.
The Organisation of Petroleum Exporting Countries pumped 33.22 million barrels a day last month, according to data compiled by Bloomberg. Iraq increased output by 160,000 barrels a day, while Iran boosted production by 300,000 barrels a day to the highest level since December 2011.
