Oil is headed for the longest run of weekly declines in almost three decades on signs the supply glut that drove prices to a six-year low will be prolonged. FuelFix.com reports that futures fell as much as 1.6% in New York, set for an eighth weekly drop.
The U.S. pumped crude in July at the fastest pace for the month since at least 1920, the American Petroleum Institute reported Thursday. The nation’s stockpiles are almost 100 million barrels above the five-year seasonal average, weekly government data showed Wednesday.
Oil has slumped more than 30% since this year’s closing peak in June amid speculation the global surplus will persist. Leading members of the Organization of Petroleum Exporting Countries are maintaining output, while Citigroup Inc. predicts crude may slide to as low as $32 a barrel, a level last seen during the global financial crisis.
“It’s all about the oversupply,” Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt, says by email. “Whereas in 2008 we had a demand shock causing the price crash, this time the crisis has been man-made, as OPEC inflates the surplus with overproduction.”
West Texas Intermediate for October delivery lost as much as 67 cents to $40.65 a barrel on the New York Mercantile Exchange and was at $41.07 at 11:47 a.m. London time. The volume of all futures traded was about 34% above the 100-day average. The September contract expired Thursday after rising 34 cents to $41.14. Prices have decreased 3.4% this week.
