Oil Set for Longest Run of Weekly Losses Since 2015 Amid Glut

(Bloomberg) 

Oil headed for the longest run of weekly losses since August 2015 as OPEC member Libya restored production just as the surplus in the U.S. showed few signs of abating.

While futures added 0.9 percent in New York, they’re down 2.1 percent for the week, a fourth straight decline. U.S. inventories fell less than forecast last week, keeping supplies more than 100 million barrels above the five-year average, according to data from the Energy Information Administration on Wednesday. Libya, exempt from the OPEC-led deal to cut supply, will boost output to 1 million barrels a day by the end of July, according to the country’s National Oil Co.

Oil slumped to the lowest close in seven months this week as concerns grew that rising U.S. supplies will offset the production curbs by the Organization of Petroleum Exporting Countries and allies including Russia. New non-OPEC output next year will be more than enough to meet demand growth, the International Energy Agency said Wednesday in its first forecast for 2018.

“There is really no bullish twist to the latest U.S. data,” said Michael Dei-Michei, head of research at Vienna-based consultants JBC Energy GmbH. “Implied crude production seems to have moved upwards at a rather rapid pace, U.S. gasoline demand has taken a turn to the downside just as the summer driving season starts and total U.S. oil stocks have not drawn for two weeks.”

West Texas Intermediate for July delivery was at $44.85 a barrel on the New York Mercantile Exchange, up 39 cents, at 1:22 p.m. in London. Total volume traded was in line with the 100-day average. The contract lost 27 cents to $44.46 on Thursday, the lowest since Nov. 14.

Brent for August settlement rose 58 cents to $47.50 a barrel on the London-based ICE Futures Europe exchange. Prices are down 1.4 percent this week. The global benchmark crude traded at a premium of $2.39 to August WTI.

Libyan output will reach 900,000 barrels a day within days, National Oil Co. said on its website, citing Chairman Mustafa Sanalla. OPEC production jumped last month as Libya and Nigeria revived supply halted by attacks and political crises, a report from the group showed on Tuesday.

Oil-market news:

Canada’s oil-sands will increase production rapidly in the next three years, ranking only behind U.S. shale as the biggest contributor to global supply growth. Even if crude stockpiles drop in the next six months, concerns may shift to the paper market, Bank of America Merrill Lynch said in a report, forecasting oil in New York will trade at $47 a barrel by the end of the second quarter.