Oil headed for the first weekly decline in a month as US crude stockpiles expanded to a record, adding to a global glut that drove prices lower in the last year.
Futures were little changed in New York and poised to drop 2.3 percent this week. Crude inventories rose to 425.6 million barrels through February 13, the highest level in weekly records compiled by the Energy Information Administration (EIA) since August 1982. Oil will fall to $39 a barrel because a pullback in US production is delayed, according to Goldman Sachs Group Inc.
Rising US oil supplies have contributed to a global oversupply of crude that sent prices almost 50 percent lower in 2014. The nation’s output is set to fall this year as drastic drilling cutbacks take hold faster than projected, according to EOG Resources Inc., a shale producer, contradicting estimates for increasing supply, including those by the EIA.
“Oil inventories weighed on crude,” Phil Flynn, a senior market analyst at the Price Futures Group in Chicago, said by e-mail. “Still, in the big picture, we are hearing about more production cutbacks and spending cuts.”
West Texas Intermediate for March delivery, which expires on Friday, was up 41 cents at $51.57 a barrel in electronic trading on the New York Mercantile Exchange at 1:53 p.m. Sydney time. The more-active April future gained 40 cents to $52.23 on Friday. Front-month prices slid 98 cents to $51.16 on Thursday. The volume of all futures traded was about 73 percent below the 100-day average. Prices are down 3.2 percent in 2015.
Crude stockpiles
Brent for April settlement was 30 cents higher at $60.51 a barrel on the London-based ICE Futures Europe exchange. The contract declined 32 cents to $60.21 on Thursday. The European benchmark crude was at a premium of $8.26 to WTI for the same month, compared with $7.85 on February 13.
US crude stockpiles increased by 7.7 million barrels last week, more than double the median estimate in a Bloomberg News survey. Production surged by 54,000 barrels a day to 9.28 million a day, the highest level in weekly estimates compiled by the Energy Department’s statistical arm since January 1983.
Bloomberg News