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West Texas Intermediate declined for the third straight day to approach its lowest in four years on outlook that production cuts for the Organization of Petroleum Exporting Countries (OPEC) is being resisted by its larger members.
Futures of the American crude oil benchmark with a delivery date in December fell by as much as 0.6%, or 45 cents, for a price per barrel of $74.16. It was trading at $74.28 late morning Sydney time on the New York Mercantile Exchange via electronic trading. The more active contract for January similarly dropped by 32 cents to $74.32. Trading volume for all futures was 15% less than the 100 day average. WTI has fallen by 25% so far this year.
According to one official, OPEC countries Venezuela and Ecuador are planning to call on its members to implement a reduction in output levels. Goldman Sachs Group Inc. says, however, that a large cut may not be favored by the OPEC due to its effect of boosting the supply of shale in the US.
Oil has fallen into a bear market with the US producing output at its best pace in over three decades amidst a slowdown in demand growth around the world.
Futures of Brent, the European benchmark, with a delivery date in January fell by 1.1%, or 84 cents, for a price per barrel of $78.47. It traded with a premium over WTI of $3.83 in London’s ICE Futures Europe exchange.
Data from the American Petroleum Institute shows that supplies of crude oil in the US increased by 3.7 million barrels during the week of November 14th. Official statistics from the government due later today are expected to show a decrease of 1.5 million, says analysts surveyed by Bloomberg News.
