West Texas Intermediate crude declined as speculation the Federal Reserve may raise interest rates countered signs of lower production from the Organization of Petroleum Exporting Countries. Brent also fell in London.
WTI fell as much as 0.8 percent in New York. The dollar headed for a six-week gain versus the yen, curbing the appeal of commodities, after the Federal Reserve raised estimates for future interest rates on Sept. 17. Libya said yesterday its biggest operating oil field, Sharara, remained shut after an attack at the connected Zawiya plant.
“The Fed succeeded in not spooking the markets with a rate hike here and now, all the while raising projected interest rate paths,” Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark, said by e-mail. “Despite dwindling Libya oil output, the world still seems well-supplied with oil.”
WTI for October delivery dropped as much 73 cents to $92.34 in electronic trading on the New York Mercantile Exchange, and traded for $92.48 as of 10 a.m. London time. Prices are 0.2 percent higher this week after falling 3.8 percent during the first two weeks of this month. The volume of all futures traded was about 14 percent below the 100-day average for the time of day.
Brent for November settlement fell 21 cents to $97.49 a barrel on the London-based ICE Futures Europe exchange, curbing its weekly gain to 0.4 percent. Prices dropped 5.8 percent during the first two weeks of this month. The U.S. contract for November was at a discount of $6.05 to Brent for the same month on ICE, compared with $5.72 yesterday.
Fed officials who met Sept. 16-17 increased their median estimate for the federal funds rate to 1.375 percent at the end of next year, versus June’s forecast for 1.125 percent. The dollar added 0.1 percent to 108.79 yen in London, after touching 109.46 earlier, the highest since August 2008.
OPEC, supplier of about 40 percent of the world’s oil, may reduce its daily quota by 500,000 barrels to 29.5 million in 2015, Secretary-General Abdalla El-Badri said in Vienna on Sept. 16.
Saudi Arabia cut its crude supply by 408,000 barrels a day in August, the biggest reduction since 2012, a submission made by the country to OPEC shows. Demand for OPEC’s oil will drop to 29.2 million barrels a day in 2015 from 29.5 million this year, the group said in a Sept. 10 report.
In Libya, a rocket exploded near a crude storage tank at the Zawiya refinery on Sept. 15, according to National Oil Corp. The refinery connects to the Sharara field, the country’s biggest producer. The nation is working to restore output after a year of unrest reduced Libya to the smallest OPEC producer.
“We are at the bottom now and we expect prices to remain stable around this level the coming year,” Jens Naervig Pedersen, an economist at Danske Bank A/S in Copenhagen, said by e-mail. “Prices have gained some support from the comments from OPEC earlier this week hinting that it may lower its production target for next year.”
In the U.S., crude supplies have climbed to the highest level since 2012 for this time of the year as production surges because of the shale boom. Output rose by 248,000 barrels a day to 8.838 million during the week ended Sept. 12, the most since March 1986, according to the Energy Information Administration.
© 2009 - 2017 Dalim Media | Site by NES Tech