Prices dropped for a fifth day. Libya is scheduled to load crude from the Mellitah export terminal tomorrow with exports likely to follow from Hariga port next week, a spokesman for the state oil company said. U.S. inventories were at a four-month high, Energy Information Administration (EIA) data showed last week. WTI’s discount to Brent narrowed for a third day.
“Libya is trying to get more oil out and as they move that direction, it’s putting downward pressure on both Brent and WTI,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago. “The U.S. is awash in oil. Supply will continue to depress prices.”
WTI for December delivery fell 16 cents to $94.45 a barrel at 9:38 a.m. on the New York Mercantile Exchange after dropping to $94.06, the lowest intraday price since June 26. The volume of oil futures traded was about 21 percent below the 100-day average.
Brent for December settlement slid 37 cents, or 0.3 percent, to $105.54 a barrel on the London-based ICE Futures Europe exchange. Volume was 12 percent above the 100-day average. The European benchmark’s premium over WTI narrowed to $11.09 from $11.30 on Nov. 1.
A tanker is scheduled to load crude from El Feel field at Mellitah tomorrow and another tanker is currently loading sulfur, Mohamed Elharari, a spokesman for state-run National Oil Corp. said in an interview in Tripoli. The Hariga Port could start export next week, he said.
Production in the country, North Africa’s largest oil producer, has been slashed amid nationwide protests. Output was about 250,000 barrels a day yesterday, Elharari said. It averaged 450,000 barrels a day in October, according to a monthly Bloomberg survey of production across the Organization of Petroleum Exporting Countries.
Crude prices may decrease as the “intensity” of supply disruptions, which tightened the market in the third quarter, eases, Barclays Plc said in a report on Nov. 1. The bank maintained its fourth-quarter forecast for Brent crude at $105 a barrel.
U.S. crude inventories rose to 383.9 million barrels in the week ended Oct. 25, the most since June, according to the EIA, the Energy Department’s statistical arm. Nationwide crude supplies jumped 7.9 percent in the six weeks ended Oct. 25.
The U.S. will account for about 21 percent of global oil demand this year, almost double the estimate for China, the second-largest consuming country, according to forecasts from the International Energy Agency in Paris.
“The oil market has been oversupplied for some time now, and that hasn’t changed,” said Myrto Sokou, senior research analyst at Sucden Financial Ltd. in London.
CME Group Inc., owner of the Nymex, cut the margin requirement for speculators on front-month futures by 9.8 percent to $4,070 per contract from $4,510, the company said in a notice to customers on Nov. 1. The rate will be effective at the close of business tomorrow.
“Lower margins are usually reasons for people to buy more futures,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “Supplies are keeping pressure on prices.”
Information from Bloomberg/World Oil was used in this report.