WTI Falls for a Second Day as Chart Signals Unsustainable Gains West Texas Intermediate crude declined for a second day as a technical indicator showed that recent gains may be unsustainable. Futures slid as much as 0.7 percent in New York after dropping yesterday for the first time in three days as the relative strength index signaled prices have advanced too quickly. U.S. crude stockpiles shrank by 2.6 million barrels last week, the American Petroleum Institute said, according to a person familiar with the data. The government will report a decline of 2 million, a Bloomberg survey shows. “Current prices are high given the underlying supply and demand fundamentals,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “We’re probably going to need to see sustained weakness in the U.S. dollar or a deterioration in the Middle East to sustain significantly higher prices from here.” WTI for August delivery fell as much as 71 cents to $105.29 a barrel in electronic trading on the New York Mercantile Exchange and was at $105.43 at 2:25 p.m. Singapore time. The volume of all futures traded was about 6 percent below the 100-day average. The contract lost 32 cents yesterday to $106, the lowest closing price since July 12. Brent for September settlement declined as much as 43 cents, or 0.4 percent, to $107.71 a barrel on the London-based ICE Futures Europe exchange. The August contract yesterday expired at $109.40. The European benchmark grade was at a premium of $2.56 to WTI futures, down from $3.40 yesterday. WTI’s 14-day relative strength index closed above 70 for an eighth day yesterday, according to data compiled by Bloomberg. A chart reading above that level tends to trigger sell orders because it indicates the market is overbought. The RSI is at about 68 today. U.S. gasoline stockpiles rose by 2.6 million barrels last week, said the person familiar with the API data. An Energy Information Administration report today will probably show supplies decreased by 1.5 million barrels, according to the median estimate of nine analysts surveyed by Bloomberg. Distillate inventories, including heating oil and diesel, increased by 3.8 million barrels, the API said. Supplies are projected to climb by 1.5 million barrels. The EIA, the Energy Department’s statistical arm, is scheduled to release its inventory report at 10:30 a.m. in Washington. The API began releasing its weekly supply statistics on a subscription basis this month. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA for its weekly survey. WTI surged above $100 a barrel on July 3 for the first time since September as Egypt’s political upheaval heightened concern that unrest in the most populous Arab country will spread and disrupt Middle Eastern oil supplies. Islamist supporters of Egypt’s deposed President Mohamed Mursi announced fresh protests in Cairo after rejecting the new interim government. Rebuffing a government offer of reconciliation talks, the Muslim Brotherhood’s Freedom and Justice Party that backed Mursi regards the Cabinet sworn in yesterday as “illegitimate” and formed “over the blood of martyrs,” spokesman Hamza Zawba said by phone. An Islamist coalition called for mass protests today under the slogan “Insistence.” U.S. lawmakers grilled oil producers and refiners yesterday, seeking an explanation for the rise in gasoline prices at the pump amid a boom in domestic crude production. “Our people want to know why the flood of new domestic crude oil isn’t lowering prices at the pump,” said Ron Wyden, an Oregon Democrat and chairman of the Senate Energy and Natural Resources Committee. “There is no question that the lower oil costs are not getting through to Americans’ wallets.’’ Gasoline futures for August delivery fell 1 percent to $3.1018 a gallon on Nymex at 2:30 p.m. in Singapore. That’s the biggest decline since June 20.
Posted on: Wed, 17 Jul 2013 06:48:20 +0000
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