WTI extends losses on supplies data

West Texas Intermediate fell for a second day after a report by the American Petroleum Institute showed on Tuesday that U.S. crude inventories rose above projections last week to the highest since June. Projections for a confirmation by the Energy Information Administration fanned negative sentiment. Speculations that FOMCs meeting will conclude today with no change in Feds massive bond buying program limited losses.

On the New York Mercantile Exchange, WTI crude for delivery in December fell by 0.53% to $97.68 per barrel by 7:57 GMT. Prices held in range between days high and low of $97.80 and $97.41 per barrel. Light, sweet crude plunged 0.9% on Tuesday and extended its weekly decline to 0.2% on Wednesday, headed for a second monthly retreat.

Meanwhile on the ICE, Brent futures for settlement in December stood at $108.99 a barrel at 7:56 GMT, down 0.02% on the day. Prices shifted in a days range between $109.02 and $108.60 a barrel. The European benchmark shed 0.6% on Tuesday but extended its weekly decline to 1.7% on Wednesday.

Market sentiment remained dampened after the industry-funded American Petroleum Institute reported on Tuesday that U.S. crude oil stockpiles rose by 5.9 million barrels last week to the highest since June, a sixth consecutive weekly decline. Gasoline inventories added 740 000 barrels, while distillate fuel supplies fell by 2.7 million barrels. API also said that stockpiles at Cushing, Oklahoma, the biggest U.S. storage hub and delivery point for NYMEX-traded contracts, rose by 5.9 million barrels compared to analysts expectations for a 2.2 million increase.

APIs statistics however are considered as less reliable than EIAs data as they are based on voluntary information provided by operators of refineries, pipelines and bulk terminals. The Energy Information Administration is scheduled to release its report on Wednesday at 14:30 GMT. According to a weekly Bloomberg News survey of analysts, the government agency will likely report that U.S. crude oil inventories rose by 2.4 million to 382.2 million barrels in the week ended October 25, the highest in four months. Motor gasoline stockpiles are projected to have fallen by 200 000 barrels, while distillate fuel supplies probably declined by 1 million barrels, the survey showed.

Michael McCarthy, a chief market strategist at CMC Markets in Sydney, said for Bloomberg: “We’re seeing a picture of weakness. The drop in demand from U.S. consumers is likely to weigh on prices.”

Fed stimulus

The oil market however continued to draw support on broad expectations the Federal Reserve will refrain from trimming its monetary stimulus this year. Those speculations were backed by mixed U.S. economic data on Tuesday and previous downbeat manufacturing, housing and employment numbers. According to a Bloomberg survey of 40 analysts conducted on October 17-18, the Fed will begin decelerating its monetary stimulus in March.

A report by the Census Bureau showed that core retail sales, excluding the volatile automobile sales, rose by 0.4% in September after adding 0.1% in August and matched analysts’ projections.

However, total retail sales inched down 0.1% last month following the biggest drop in sales at auto dealers since October 2012. Analysts expected a 0.1% increase after August’s 0.2% expansion. Automobile sales plunged 2.2% last month following a 0.7% increase in August.

Despite the signs of sustained strength in the U.S. economy prior to the 16-day government shutdown in October, market players await the upcoming economic data which will include the fiscal deadlock period. A report by the Conference Board showed that consumer confidence in the U.S. fell to 71.2 in October, the lowest since April. September’s reading received an upward revision to 80.2 from initially estimated at 79.7. Analysts expected a moderate drop to 75.0.

A separate report by the Department of Labor showed that wholesale prices in the U.S. unexpectedly dropped by 0.1%, defying analysts’ projections for a 0.2% expansion following August’s 0.3% gain. This was the first decline since April. Year-on-year, the producer price index advanced by 0.3%, the least since October 2009, and underperformed both expectations for a 0.6% gain and the preceding period’s 1.4% increase.

On Monday, U.S. pending home sales plunged 5.6%, the most since May 2010, and confounded analysts’ projection for a 0.1% increase after falling by 1.6% in August. At the same time, manufacturing production managed to barely rise last month after the production of computer and electronic goods fell, indicating that business spending by the end of the third quarter eased. Output at factories inched up by 0.1% and August’s reading received a downward revision to 0.5%. Analysts surveyed by Bloomberg expected a 0.3% advance in September.

Tetsu Emori, a commodities fund manager at Astmax Investments, commented for CNBC: “If (the Fed) acts as expected and there is no change in their position, it will likely support oil prices, but not cause them to be pushed up significantly.”

Libyan output

A renewed reduction in Libyas oil output and exports also underpinned the market. The country, which holds Africas biggest crude reserves, is exporting as much as 90 000 barrels of oil per day, according to Reuters calculations. This was less than a tenth of the African nation’s capacity. Officials said on Monday that production has fallen to below 300 000 bpd, less than a half of what Libya pumped last month.

Libya’s prime minister said exports from the eastern port of Hariga will resume in a week after protests kept it shut for two months and that would bring back online capacity of 110 000 barrels per day. However, the tribe which is controlling the terminal denied in a statement on Tuesday that the port was about to be reopened.