West Texas Intermediate crude remained near the lowest level since the beginning of June after the Organization for Economic Cooperation and Development trimmed its global economic growth forecast for this year and the next, limiting world demand outlook. Market players also awaited the release of a private U.S. inventories report by the American Petroleum Institute later today that may show stockpiles rose for a ninth consecutive week to the highest since June. Resumption of operations at a Libyan port allowing a major oilfield to ramp up production also weighed on prices. A weaker U.S. dollar provided some support.
On the New York Mercantile Exchange, WTI crude for settlement in January traded at $93.86 per barrel at 15:55 GMT, up 0.19% on the day. Prices shifted in a days range between $94.05 and $93.23 per barrel. The U.S. benchmark fell by 0.1% on Monday but rose back to positive weekly territory on Tuesday.
Meanwhile on the ICE, Brent oil for delivery in January fell by 0.38% to $108.06 a barrel by 15:55 GMT. The contract held in a days range between $108.63 and $107.59 a barrel. The European benchmark fell by 0.1% on Monday and was down little nearly 0.4% on weekly basis on Tuesday.
Prices were pressured on outlook for reduced demand as the Organization for Economic Cooperation and Development lowered its forecast for global growth to 2.7% this year and 3.6% in 2014, down from 3.1% and 4% projected in May, respectively.
Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut, commented for Bloomberg: “The OECD reduced its output for global growth, which is weighing on everything, not just oil. We’re looking for a ninth straight build in U.S. crude stocks. These two factors tell you everything you have to know about the market.”
Market players awaited the release of EIAs weekly U.S. crude stockpiles statistics on Wednesday. According to the median estimate of 11 analysts surveyed by Bloomberg, inventories probably added 1 million barrels in the week ended November 15 and equaled 389.1 million, the highest level since June.
The industry-funded American Petroleum Institute will release its separate report later today. Its private report however is considered as less reliable than EIA’s statistics as it is based on voluntary information provided by operators of refineries, bulk terminals and pipelines.
The Energy Information Administration reported last Thursday that U.S. crude inventories jumped by 2.6 million barrels in the week ended November 8, exceeding more than three times an anticipated 800 000 barrels increase. This was an eight straight weekly surge. Refineries operated at 88.7% of their operable capacity, up from 86.8% a week earlier. Inventories at Cushing, Oklahoma, the biggest U.S. storage hub and delivery point for NYMEX-traded contracts, rose by 1.7 million barrels to 38.2 million. Supplies at the hub have climbed for five consecutive weeks, the longest streak since January.
Libyan port reopens
The oil market was pressured on Tuesday after a spokesman for the state-run National Oil Corp. said that operations at the Mellitah port have resumed after protests ended on Saturday, allowing the second-largest oilfield in western Libya El Feel to resume production.
Members of the Amazigh minority closed the Mellitah complex, which is run by NOC and Italys Eni. Output in Africas biggest holder of crude reserves fell to an average of 450 000 barrels of oil per day in October, down from 1.45 million bpd a year earlier, data by Bloomberg showed.
“There have been no protesters in the port since Saturday, but I cannot guarantee that they will not return. As long as there are no protesters in the complex and we can operate safely, we will,” National Oil Corp. spokesman Mohammed al-Harari said for CNBC. “Starting tomorrow, we expect it to be getting back over 80,000 barrels per day.”
Market players also awaited the conclusion of the next round of talks between Iranian diplomats and their counterparts from the five permanent members of the U.N. Security Council and Germany. A senior U.S. official hinted on Friday a deal with Iran was “quite possible” this week but U.S. Secretary of State John Kerry said on Monday he had no specific expectations about reaching an accord. If an agreement was to be struck, it would lift U.S. and EU sanctions on Iran’s oil exports, paving the way for the return of more than 1 million barrels of oil per day to the global market. The two sides are to reconvene in Geneva on Wednesday.