2014.04.2503:22:20UTC+00WTI Oil Marches Toward Weekly Decline

West Texas Intermediate marched toward for a weekly pullback and extended its discount to London-exchanged Brent after crude stockpiles developed to the most since 1931 in the U.S., the world’s biggest oil user.

Futures in New York are on tracked for a 2.2 percent weekly pullback, the largest in more than a month. U.S. crude supplies spiked up for the 13th time in 14 weeks, the Energy Information Administration stated April 23. U.S. Secretary of State John Kerry warned Russia of making “an expensive mistake” in Ukraine as Russia’s military started drills on the two nations’ border.  WTI’s discount to Brent was at $8.40 a barrel.

“The expanding stockpiles in the U.S. further widens the spread between Brent and WTI,” Will Yun, a commodities analyst at Hyundai Futures Co. in Seoul said by telephone. “U.S. crude supplies are expanding which can still drive WTI prices down. Brent is more influenced by geopolitical issues between Ukraine and Russia.”

WTI for June delivery was at $102 a barrel, climbed 6 cents, in electronic transaction on the New York Mercantile Exchange at 10:55 a.m. Seoul time. The contract skyrocketed 50 cents to $101.94 yesterday. The volume of all futures exchanged was about 43 percent under the 100-day average.

Brent for May settlement was at $110.41 a barrel, increased 8 cents, on the ICE Futures Europe exchange, which is based in London. It spiked up 1.1 percent to $110.33 yesterday, the topmost close since March 3. The European benchmark crude’s premium to WTI closed at $8.39 yesterday, the peak level since March 17.

U.S. ‘Glut’

U.S. crude stockpiles developed by 3.52 million barrels to 397.7 million last week, based from the EIA, the Energy Department’s statistical arm.

Inventories along the Gulf Coast, known as PADD 3, appreciated by 2.44 million barrels to 209.6 million, the best in EIA information going back to 1990. Supplies have bolstered in the region since January as the southern leg of the Keystone XL pipeline started moving oil from Oklahoma to the Gulf of Mexico while U.S. law bars almost all exports.

Crude shipments by OPEC, excluding Angola and Ecuador, are projected to drop down 2.1 percent to 23.37 million barrels a day in the four weeks to May 10 in the middle of satisfactory U.S. inventories, based from Oil Movements, a Halifax, England-based researcher.

“There’s certainly a glut in the U.S., the U.S. is choking on crude,” Roy Mason, the founder of Oil Movements, said by phone yesterday.

‘Expensive Mistake’

Kerry advised that Russia was running out of time to obey with an accord singed last week in Geneva targeted at calming down disputes in Ukraine.

“If Russia continues in this direction, it will not just be a grave mistake, it will be an expensive mistake,” Kerry said yesterday in Washington.

Russia is the world’s second-biggest net oil exporter and supplied 30 percent of Europe’s natural gas last year, based from the EIA, the Energy Department’s statistical arm.

WTI may decline next week on belief that U.S. crude inventories will maintain its upbeat record, based from a Bloomberg News survey. Thirteen of 24 analysts, or 54 percent, estimated the U.S. benchmark crude will backed down through May 2.