GO
Loading...

REFILE-UPDATE 7-U.S. crude drops below $100 for first time since July

Jeanine Prezioso
Monday, 21 Oct 2013 | 3:01 PM ET

* U.S. crude stockpiles grew more than expected in week to Oct. 11 -EIA

* EIA data shows first draw at Cushing in more than three months

NEW YORK, Oct 21 (Reuters) - Oil prices fell on Monday, with U.S. crude breaking below $100 a barrel for the first time since early July, as U.S. inventories rose.

Seasonal refinery maintenance has cut U.S. crude oil demand, widening the premium of Brent crude to U.S. oil futures to around $9.70 a barrel. Data from the U.S. Energy Information Administration for the week to Oct. 11, which was delayed until Monday by the government shutdown, showed a 4 million barrel build in domestic stockpiles for the week.

After 14 straight weeks of decline, stockpiles at the Cushing, Oklahoma, delivery point for the U.S. oil futures contract, rose 366,000 barrels in the week, according to the EIA data, which confirmed reports last week by industry intelligence provider Genscape and the American Petroleum Institute last week.

"That crude build stood out," said Gene McGillian, analyst with Tradition Energy in Stamford, Connecticut. "After last week's API data there are signs that we have strong production levels and ample supplies."

U.S. oil futures traded down as much as $1.73 per barrel at $99.08 in late afternoon. The front-month November U.S. oil futures contract, which expires at the end of trading on Tuesday, was last trading $1.64 lower at $99.17 per barrel at 1:26 p.m. EDT (1726 GMT).

U.S. oil for December delivery was trading $1.58 lower at $99.53. The December contract fell to as much as a 6-cent discount to January as traders factored in rising supplies.

Brent crude futures for December delivery slipped 38 cents to $109.56 a barrel.

This continued the forward curve into contango for the front months, meaning near contracts are lower than those of deferred months. But Amrita Sen, a chief analyst at consultant Energy Aspects, said that could change as inventories at Cushing draw once again after refinery and pipeline maintenance is over.

"Over the course of the next few weeks you expect to see Cushing draw again," she said.

Traders said Genscape on early Monday reported a inventories at Cushing declined slightly between Tuesday and Friday of last week, by 135,000 barrels.

Losses in both oil contracts were limited by belief that the U.S. Federal Reserve might delay curbing its money printing program until next year, which is largely seen as supporting oil demand.

Brent oil found support from lower global supply. Libyan output has fallen sharply and Nigerian output has been repeatedly hit by theft.

Still, speculative investors such as hedge funds cut net long positions in crude oil for the sixth week in seven, data from the Intercontinental Exchange showed on Monday.

Investors face a deluge of data this week as U.S. government agencies catch up after a 16-day shutdown. The U.S. Labor Department will release its closely watched non-farm payrolls data at 8:30 a.m. EDT (1230 GMT) on Tuesday.

The EIA's normal weekly oil data release schedule resumes with oil figures for last week due on Wednesday.