WTI futures lower as US crude supplies seen rising, weak US data

West Texas Intermediate crude fell for a fourth day in five after it hit a one-week low on Tuesday as an industry report showed US crude inventories rose last week, but inventories at Cushing, Oklahoma, fell further. A slower gain in US home prices in December and a drop in consumer confidence in February fueled some fears over the US economys recovery state. Another series of clashes between government and rebel forces in Libya supported the oil market.

On the New York Mercantile Exchange, WTI crude for delivery in April fell by 0.05% to $101.78 by 7:42 GMT and held in a daily range between $101.58 and $102.11 per barrel. The US benchmark slid by nearly 1% on Tuesday, the most in three weeks, and marked a third day of losses in four, settling at the lowest since February 14th.

Meanwhile on the ICE, Brent futures for settlement in the same month lost 0.12% to $109.38 a barrel and swung between days high and low of $109.20 and $109.68 a barrel. The European benchmark lost 1% on Tuesday and narrowed its premium to WTI to $7.68, down from $7.82 on Monday, based on closing prices.

WTI retreated after the industry-funded American Petroleum Institute reported that US crude inventories rose for a sixth week, despite a further decline in supplies at the nations biggest storage hub. Crude stockpiles gained 822 000 barrels last week to 363.3 million in the week ended February 21st, the API said, while reserves at Cushing, Oklahoma, slid by 1.07 million barrels.

Distillate fuel inventories, a closely watched category during the winter which includes diesel and heating oil, fell by 693 000 barrels, the association reported, and gasoline supplies saw a draw of 314 000 barrels.

However, API’s figures are considered as less popular than EIA’s statistics as they are based on voluntary information from operators of pipelines, refineries and bulk terminals, while the government requires reports to be filed with the Energy Information Administration.

According to a Bloomberg survey of ten analysts, the government agency will report today that US crude inventories probably jumped by 1.275 million barrels to 363.6 million in the seven days through February 21st, while distillate supplies fell by 1.25 million, followed by a 1-million-barrel drop in motor gasoline stocks.

Analysts at Phillip Futures said in a note, cited by CNBC: “Benchmark crude prices were muted during Asian trading today, as markets become skeptical about U.S. recovery over weak economic releases. Investors also squared their positions ahead of the EIAs weekly releases for more directions.”

US home prices rose slower in December from a year earlier, with the S&P/Case-Shiller Composite-20 Home Price Index posting at 13.4%, down the preceding months 13.7% reading. However, the slowdown outperformed analysts expectations for a drop to 13.3% and was largely attributed to the surprisingly cold winter in the US.

Meanwhile, declining consumer sentiment in the US also helped push prices lower. The Conference Board reported that its consumer confidence index slid to 78.1 in February, confounding analysts expectations for a jump to 80.0. Moreover, Januarys reading received a downward revision to 79.4 from initially estimated at 80.7.

Also fanning some negative sentiment, Chinas corporate debt has hit record levels, implying that the rise in credit repayment problems will trigger more defaults and a wave of restructuring in domestic companies.

However, losses were checked after another series of battles between the Libyan government and rebel autonomy groups demanding a greater share of the nations oil wealth. In the latest sign of the official governments inability to regain full control of the nations oil production, more than 100 rockets were launched in clashes between government forces and militias, which shut a power plant in southern Libya.

The African country, holder of the continent’s biggest crude reserves, is producing an average of 231 000 barrels per day after renewed protests shut the western El Sharara oilfield on February 20th, the state-run National Oil Corporation said. That is down from the average of 600 000 bpd nationwide production before the 340 000-bpd field, Libya’s second largest, was blocked once again.