)
Brent crude oil fell to the lowest in four years as forecasts for rising US crude stockpiles bolstered speculation that global supply gains are outpacing demand. West Texas Intermediate was little changed in New York.
Futures dropped as much as 1.3 per cent in London. Crude inventories in the US, the world's biggest oil consumer, probably expanded by one million barrels last week, a Bloomberg News survey showed before a government report on November 13. The oil market is oversupplied, partly because of rising US oil production, United Arab Emirates Energy Minister Suhail Al Mazrouei told reporters.
Crude is extending losses in a bear market amid signs that global demand isn't keeping pace with supply. Members of the Organization of Petroleum Exporting Countries including Saudi Arabia and Iraq are resisting calls to cut output and instead reduced export prices to the US, where they're competing with the fastest rate of production in more than 30 years.
Brent for December settlement fell as much as $1.11 to $81.23 a barrel on the ICE Futures Europe exchange, the lowest level since October 2010. It traded for $82.13 at 1:04 pm in London. WTI for December delivery was unchanged to $77.40 a barrel in electronic trading on the New York Mercantile Exchange.
The contract decreased $1.25 yesterday to the lowest close since Nov. 4. The volume of all futures traded was about 82 percent above the 100-day average for the time of day. Prices are down 21 percent this year.
U.S. crude stockpiles probably increased to 381.2 million barrels in the week ended Nov. 7, according to the median estimate in the Bloomberg survey of seven analysts before the Energy Information Administration's report. That would be the highest since July.
The American Petroleum Institute in Washington is scheduled to publish separate supply data tomorrow. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, the Energy Department's statistical arm.
OPEC Production
OPEC, whose 12 members supply about 40 percent of the world's oil, pumped 30.974 million barrels a day in October, data compiled by Bloomberg show. The group's collective target of 30 million was set in January 2012.
"There's sufficient supply to meet demand," said David Lennox, a resource analyst at Fat Prophets in Sydney, who predicts OPEC will maintain its output target when it gathers on Nov. 27. "A substantial cut is needed to see prices rally." Kuwait has no plans to cut its output, which is set to climb to 4 million barrels a day by 2020, Oil Minister Ali Al- Omair said yesterday. It produced 2.85 million a day in October, on par with the U.A.E. and behind Saudi Arabia and Iraq.
Iraq reduced its official selling price for crude shipments to the U.S. yesterday while raising costs for customers in Asia and Europe, following a similar Saudi move a week ago. OPEC's second-largest producer is offering December cargoes of its Basrah Light grade to the U.S. at a discount to the Argus Sour Crude Index, a regional benchmark, compared with a premium in the previous six months, according to State Oil Marketing Co., known as SOMO.
The collapse in oil prices may deter investment in exploration and production projects predicated on $100 crude, U.A.E. Minister Al Mazrouei said.
"If this is a phenomenon that's going to last, it will affect some future investment, especially in the more expensive oil developments," he said. "If this is a short fluctuation, we're not going to be panicking. And we never panic." --With assistance from Mark Shenk in New York, Anthony DiPaola in Dubai and Mahmoud Habboush in Abu Dhabi.
