Oil may slip as inventories rise amid more output
new york — West Texas Intermediate crude futures may decline this week as US inventories increase amid rising production and low refinery processing, a survey showed.
Sixteen of 25 analysts, or 64 per cent, forecast crude will fall through November 15. Five respondents, or 20 per cent, predicted a gain. Four projected no change. Last week, 69 per cent of analysts said there would be a decline.
US crude stockpiles increased 1.58 million barrels to 385.4 million in the week ended November 1, the most since June 21, according to the Energy Information Administration.
Supplies at Cushing, Oklahoma, where US crude futures are delivered, rose by 991,000 barrels to 36.5 million, the highest since August.
“The supply of oil being so strong here will continue to weigh on prices,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago.
“We have a longer-term target of $86,” he added.
Crude inventories have climbed 29.8 million barrels since September 13, EIA data show. Production was 7.86 million barrels a day last week after reaching 7.90 million in the period ended October 18, the most since March 1989. The refinery utilisation rate was 86.8 per cent compared with a five-month low of 85.9 per cent on October 18.
US crude output has surged as the combination of horizontal drilling and hydraulic fracturing, or fracking, unlocked supplies trapped in shale formations in the central US, including the Bakken in North Dakota and the Eagle Ford in Texas. Crude futures fell one cent to $94.60 a barrel last week on the New York Mercantile Exchange. Futures have advanced three per cent this year.
The oil survey has correctly predicted the direction of futures 50 per cent of the time since its start in April 2004.
survey of oil analysts and traders, conducted each Thursday, asks for an assessment of whether crude oil futures are likely to rise, fall or remain neutral in the coming week. —