West Texas Intermediate headed for the longest run of weekly declines in almost three decades amid speculation OPEC will refrain from reducing production to ease concern that supply is outpacing demand.
Futures were little changed in New York, heading for a seventh weekly drop, the longest losing streak since March 1986. Slumping prices reflect a growing consensus that the Organization of Petroleum Exporting Countries will maintain output, according to Goldman Sachs Group Inc. Crude supplies at Cushing, Oklahoma, the delivery point for WTI, expanded to the highest level since May, a U.S. government report showed.
Oil has collapsed into a bear market as leading OPEC members resisted calls to cut production and instead reduced some export prices while U.S. output has climbed to the highest level in more than three decades. Venezuela, Libya and Ecuador have asked for action to prevent crude from falling further. The group is scheduled to meet Nov. 27 in Vienna.
WTI for December delivery was at $74.34 a barrel in electronic trading on the New York Mercantile Exchange, up 13 cents at 10:46 a.m. Sydney time. The contract slid $2.97 to $74.21 yesterday, the lowest close since September 2010. The volume of all futures traded was about 47 percent above the 100-day average. Prices are 5.5 percent lower this week and have decreased about 25 percent this year.
Brent for December settlement expired yesterday after falling $2.46, or 3.1 percent, to $77.92 a barrel on the London-based ICE Futures Europe exchange. The more active January contract dropped $3.63 to $77.49. The European benchmark crude ended the session at a premium of $3.71 to WTI.
Source : Bloomberg