WTI futures fall for a fourth day on inventories data, housing data support

West Texas Intermediate crude fell for a fourth straight day after industry group the American Petroleum Institute reported that U.S. crude inventories jumped for a tenth consecutive week in the seven days through November 22. Tuesdays upbeat housing data continued to point at robust economic recovery in the worlds largest oil consumer but also spurred speculations for an earlier-than-projected Fed stimulus tapering. The market, and largely the Brent benchmark, drew support on recurring protests in Libya, which continued to fuel concern over supplies from Africas biggest crude reserves holder. OPEC expected to reaffirm its monthly quota at its December meeting.

On the New York Mercantile Exchange, WTI crude for settlement in January traded at $93.36 per barrel at 8:07 GMT, down 0.35% on the day. Prices shifted in a days range between $93.82 and $93.31 a barrel. The U.S. benchmark fell by more than 0.9% on Tuesday and extended its weekly decline to nearly 1.6% on Wednesday.

Meanwhile on the ICE, Brent futures for delivery in January were mostly unchanged at $110.82 a barrel at 8:07 GMT, down 0.05% on the day. Prices held in range between days high and low of $111.18 and $110.74 a barrel respectively. The European benchmark was little changed on Tuesday and trimmed its weekly advance to 0.2% on Wednesday.

Oil prices were pinned down after the industry-funded American Petroleum Institute reported that U.S. crude oil stockpiles rose for a tenth consecutive week last week. Stockpiles surged by 6.92 million barrels in the seven days to November 22. Motor gasoline inventories jumped by 201 000 barrels, while distillate fuel supplies fell by 1.71 million barrels.

APIs data however is considered as less reliable than EIAs statistics as they are based on voluntary information from operators of refineries, pipelines and bulk terminals, while the government agency requires reports to be filed in. According to the median estimate of 11 analysts surveyed by Bloomberg, the Energy Information Administration is expected to report that U.S. crude oil inventories increased by 750 000 barrels last week to 389.2 million amid a rise in production rate. Motor gasoline supplies are projected to have gained 500 000 barrels, while distillate fuel stockpiles probably declined by 1 million.

U.S. housing data

The American benchmark was also supported after a series of data showed on Tuesday the U.S. housing market is steadily recovering despite the recent rise in mortgage rates. A report by the Commerce Department showed that permits for U.S. home construction, which lead housing starts by at least a month, rose to the highest level in nearly 5-1/2 years in October, indicating a robust recovery of the U.S. housing market. Building permits jumped to 1.034 million last month, defying expectations for a decrease to 0.940 million. Permits surged to 0.970 million in September, beating expectations for a rise to 0.930 million from August’s 0.926 million.

Year-on-year, building permits surged by 13.9% in October, while on monthly basis they advanced by 6.2% following a 5.2% gain in September.

Meanwhile, a separate gauge measuring prices of single-family home prices in the U.S. jumped in September to the highest annualized level in 7-1/2 years. The S&P/Case-Shiller Composite-20 Home Price Index, which measures prices at 20 metropolitan areas, rose by an annualized 13.3% in September, beating forecasts for a moderate gain to 13.0% from August’s 12.8% increase. Month-on-month, numbers matched forecasts for a 0.7% increase, following a 1.3% jump in August.

Libya protests

The oil market, and mainly the Brent benchmark, drew support on renewed protests in Libya, the holder of Africas biggest crude reserves. Libyan civil servants, oil workers and private sector employees went on a strike in the port city of Benghazi on Tuesday, protesting against insufficient security after clashes between the Libyan army and armed militants in Benghazi on Monday resulted in the death of at least nine people.

Output in the African country fell to an average of 450 000 barrels of oil per day in October, down from 1.45 million bpd a year earlier, according to estimates from Bloomberg.

Prices however remained under pressure after Iranian diplomats and their counterparts from six world powers struck a groundbreaking diplomatic agreement on Sunday on curbing the Islamic republics nuclear program in exchange for a relief in tough economic sanctions, including easing the trade in oil with the countrys six remaining trade partners. Market players however did not expect any additional barrels of Iranian oil to enter the global market immediately, which limited the impact on pricing.

Meanwhile, according to 18 out of 20 analysts and traders surveyed by Bloomberg, OPEC is expected to retain its production target of 30 million bpd at its next meeting on December 4. The group pumped 30.62 million barrels per day in October, slightly up from Septembers 30.58 million bpd.