WTI futures hover over 4-1/2-month low on supplies data, Libyan output

Both West Texas Intermediate and Brent benchmarks were steady near yesterdays multi-month lows on expectations the American Petroleum Institute and the Energy Information Administration will report U.S. crude oil inventories rose for a seventh consecutive time last week amid record-high output and low refinery utilization rate. Heavy gunfire in Libyas capital city and ongoing protests which crippled the African countrys oil production and exports continued to support the market. Investors eyed upcoming U.S. employment and GDP data later in the week to gauge oils demand prospects and Feds tapering timetable.

On the New York Mercantile Exchange, WTI crude for delivery in December fell by 0.02% to $94.60 per barrel by 8:32 GMT. Prices held in range between days low of $94.37, near yesterdays 4-1/2-month low of $94.08 a barrel, and days high of $94.91. The American benchmark marked a fifth consecutive daily retreat on Monday and extended its weekly decline on Tuesday.

Meanwhile on the ICE, Brent futures for settlement in December traded at $106.27 per barrel at 8:33 GMT, up 0.03% on the day. Prices varied in a days range between $106.52 and $105.96 a barrel. The European benchmark fell to a four-month low of $105.13 per barrel on Monday but settled the day higher, extending its weekly advance to over 0.3% on Tuesday.

Market sentiment remained dampened amid expectations the American Petroleum Institute and the EIA will report U.S. crude oil stockpiles rose for a seventh consecutive week last week after U.S. crude output reached the highest rate in 14 years in October, while refinery utilization fell as units were idled for maintenance works. According to a weekly Bloomberg survey of analysts, crude oil inventories probably rose by 2.2 million barrels to 386.1 million in the week ended November 1. Gasoline supplies are expected to have fallen by 400 000 barrels to 213.4 million, the lowest in a year, while distillate fuel inventories likely dropped by 1.5 million barrels to 121.2 million.

The industry-funded APIs statistics however are considered as less reliable than EIAs data as they are based on voluntary information provided by operators of refineries, pipelines and bulk terminals. The government agency will release its report at 14:30 GMT on Wednesday.

Investors will also be keeping a close watch on this weeks highly anticipated U.S. data. On Tuesday, the Institute for Supply Management will likely report the U.S. service sector expanded at a slightly slower pace in October from a month earlier. On Thursday, the preliminary reading of the U.S. Q3 GDP growth may show a smaller expansion compared to the preceding three months. Personal Consumption Expenditures probably fell in the third quarter, while core consumer spending is expected to have advanced. On Friday, October’s non-farm payrolls are projected to have further eased, while the unemployment rate likely inched up to 7.3%, according to analysts’ expectations. Personal income and personal spending are projected to have risen at a slower pace from a month ago. The preliminary reading of the Thomson Reuters/University of Michigan Consumer Sentiment Index may show a rebound to 74.5 in November, up from 73.2 in October.

Libyan output

The market continued to draw support after ongoing protests in Libya crippled the nations crude production and exports. Recent protests and strikes in Libya, Africas biggest holder of crude reserves, reduced its exports to around 10% of its 1.25 million barrels per day capacity. Mohamed Elharari, a spokesman at the state-run National Oil Corp., said on Monday the countrys production pace fell to 200 000 barrels per day on November 3 after it was steady at around 600 000 for a month before the recent renewal of protests in some areas.

National Oil Corp. officials said outbound shipments at the Hariga terminal may resume next week after militias and tribes blocked eastern ports and fields demanding greater share of power and wealth from oil operations.

On Sunday, leaders of an autonomy movement in eastern Libya declared a regional government, challenging the weak central government. Heavy shooting in Tripoli early on Tuesday also underlined the governments current inability to control militia groups, fueling concern over stable supply from the African country.

Tetsu Emori, a commodities fund manager at Astmax Investments, said for CNBC: “The outage in Libya is keeping the demand-supply balance quite tight as we head into the peak heating oil demand season. Libya is not a very big exporter, but it is not very small, either. It is a factor that is supporting prices.”