Tuesday, 10 November 2015 01:33
NEW YORK: Oil prices edged lower on Monday after data showing fresh builds at the delivery point for U.S. crude futures and lower Wall Street share prices offset bullish OPEC demand projections.
Crude futures have fallen about $ 4 a barrel over the past three sessions, partly on concerns that stockpiles of refined U.S. oil products like heating oil were also growing as refineries ramp up output as they emerge from maintenance season amid milder-than-usual weather.
Near record pumping of oil by Russia, Saudi Arabia and other big global producers has also weighed on the market.
On Monday, front-month Brent crude futures were down 20 cents at $ 47.22 a barrel by 11:50 a.m. EST (1650 GMT).
The front-month U.S. crude’s West Texas Intermediate (WTI) benchmark slipped 33 cents to $ 43.96.
The discount between WTI’s first and second months deepened for a third straight day, reaching its widest in 6-1/2 months. Known as “contango”, the discount has been growing as traders store oil that is immediately available to deliver later, in the hope of getting higher prices when fundamentals improve.
“The spread weakness is being driven mainly by a large and increasing level of supply,” said Jim Ritterbusch of Chicago-based oil consultancy Ritterbusch & Associates. “More specifically, an expected supply upswing at Cushing may be spurring some of the spread action.”
Data from market intelligence firm Genscape showed stockpiles at the Cushing, Oklahoma delivery point for U.S. crude futures rose by more than 1.8 million barrels between Oct 30 and Nov. 5, traders who saw the data said.
On Wall Street, the key U.S. stock gauge, the S&P 500 , was down 1.2 percent.
Oil prices were up earlier in the session after OPEC said it expected global demand to remain strong next year. Abdullah al-Badri, Secretary-General of the Organization of the Petroleum Exporting Countries, said he expects the oil market will become more balanced in 2016 as demand continues to grow.
Gasoline was the one bright spot on the petroleum complex, rising almost 1 percent and heading higher for a second straight session, as analysts cited strong demand due to low retail prices.
The gasoline “crack”, or profit for refining crude into the motor fuel, hit a two-month high above $ 14 a barrel.
