Oil resumes decline near $30 as U.S. supplies worsen global glut

WASHINGTON (Bloomberg) -- Oil resumed its decline near $30/bbl after U.S. industry data showed crude stockpiles increased, exacerbating a global glut.

 

Futures slid as much as 3.7% in New York. Inventories surged by 11.4 MMbbl last week, the industry-funded American Petroleum Institute was said to report. If government data on Wednesday -- which is forecast to show a 4 million-barrel gain -- shows an equivalent rise, it would be the largest increase in weekly reports since May 1996.

 

“Looks like U.S. shale oil producers remain resilient to the low oil prices and keep producing,” Michael Poulsen, an analyst at Global Risk Management Ltd., said in a report. “Yesterday’s weekly oil stocks data from the API showed a huge build in crude stock. This afternoon’s oil inventory report from the EIA will be watched closely for confirmation of the trend.”

 

Crude is down about 18% this year as volatility in global markets adds to concern over brimming U.S. stockpiles and the outlook for increased exports from Iran after the removal of international sanctions. Independent American oil explorers are forecast to report 2015 losses totaling almost $14 billion amid the price collapse, according to data compiled by Bloomberg.

 

West Texas Intermediate for March delivery fell as much as $1.15 to $30.30/bbl on the New York Mercantile Exchange, erasing Tuesday’s 3.7% gain. The contract was at $30.59/bbl at 9:30 a.m. London time. Total volume traded was almost double the 100-day average.

 

Oil Supplies

 

Brent for March settlement lost as much as 86 cents, or 2.7%, to $30.94/bbl on the London-based ICE Futures Europe exchange. The contract added $1.30, or 4.3%, on Tuesday. The European benchmark crude traded at a premium of 63 cents to WTI.

 

Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI and the biggest U.S. oil-storage hub, fell by 660,000 bbl last week, the API reported Tuesday, according to a person familiar with the data. Nationwide supplies are forecast to increase for a third week, a Bloomberg survey showed before an Energy Information Administration report Wednesday.

 

Hess Corp. starts earnings season for the U.S. explorers on Wednesday, with analysts predicting an annual loss of $1.6 billion, its worst performance in at least 28 years. It will be followed by peers including Murphy Oil Corp. and Anadarko Petroleum Corp.