Oil traded near the lowest level in almost a week in New York after U.S. crude stockpiles increased and the World Bank cut its economic growth forecasts.
Futures were little changed after slipping the most in almost a month yesterday. U.S. crude supplies gained a second week and inventories at Cushing, the delivery point for West Texas Intermediate, rose to a record, data from the industry- funded American Petroleum Institute showed. An Energy Department report today may show stockpiles climbed by 2.2 million barrels, according to a Bloomberg News survey. The Washington-based World Bank projects the global economy will expand 2.4 percent this year, down from a June forecast of 3 percent.
“Inventories are quite high,” said David Lennoux, an analyst at Fat Prophets in Sydney. “We have to see if there will be a follow-through in demand in the U.S.”
Crude for February delivery was at $93.51 a barrel, up 23 cents, in electronic trading on the New York Mercantile Exchange at 1:46 p.m. Singapore time. The contract declined 0.9 percent to $93.28 yesterday, the biggest drop since Dec. 21 and the lowest close since Jan. 9.
Brent for February settlement, which expires today, was up 37 cents at $110.67 a barrel on the London-based ICE Futures Europe exchange. The more active March contract rose 35 cents to $109.98. The front-month European benchmark contract was at a premium of $17.16 to WTI. It closed at $17.02 yesterday, the narrowest spread since Sept. 19.
Total U.S. crude stockpiles rose by 46,000 barrels last week, according to the API. Supplies at Cushing increased 1.8 million barrels, a sixth weekly gain, to a record 51.8 million.
WTI dropped 7.1 percent in 2012 as the U.S. shale boom deepened the glut at Cushing, America’s largest storage hub. That left it at an average discount of $17.47 a barrel to Brent last year, compared with a premium of about 7 cents in the five years through 2010. Brent, the benchmark grade for more than half the world’s crude, climbed 3.5 percent last year.
U.S. gasoline supplies rose by 4.1 million barrels, the API said. They are projected to gain by 2.7 million in today’s Energy Department report, according to the median estimate of 11 analysts in the Bloomberg survey. Distillate inventories, a category that includes heating oil and diesel, fell 568,000 barrels, the API said. An increase of 1.5 million was forecast for the government report.
WTI may extend losses as a measure of technical momentum declines. On the daily chart, the moving average convergence- divergence indicator has fallen to the smallest premium to its signal line in a month, according to data compiled by Bloomberg. Investors typically sell contracts when the MACD drops below the signal line, known as a bearish crossover.
The World Bank cut its projection for economic growth in the U.S., the world’s biggest crude consumer, by 0.5 percentage point to 1.9 percent in its twice-yearly report yesterday. It reduced its forecast for Japan, the third-biggest crude user, to 0.8 percent from 1.5 percent, predicted a second year of contraction in the euro region and lowered its estimates for emerging markets led by Brazil, India and Mexico. China, the second-biggest oil consumer, was cut to 8.4 percent from 8.6 percent.