Oil futures fell in electronic trading Tuesday, extending their losses made the previous day on the back of concerns about rising supply.
The benchmark U.S. December crude contract — due to expire on Wednesday — slipped 12 cents, or 0.1%, lower to $92.91 a barrel. The move followed a 0.9% retreat Monday, when oil futures closed on the New York Mercantile Exchange at their lowest level since the end of May.
January Brent crude gave up 42 cents, or 0.4%, to $108.05 a barrel, accelerating from a 3-cent loss Monday.
The fall in crude prices followed news reports that Saudi Arabia’s exports for September had hit their highest monthly level in eight years, as well as caution as Western powers prepared to begin a new round of negotiations with Iran on Wednesday over the possible easing of sanctions.
However, Citi Futures, which had been bearish on crude in recent months, is now recommending long positions on both Nymex and Brent oil.
Citing Nymex crude’s 14% fall from its late-August highs, Citi Futures analyst Timothy Evans said that “the price swing alone suggests that risk and reward parameters from the current level are different. Some of the downside risk has been realized, and there is some added upside potential.”
Among other factors, he pointed to an expected recovery in refinery runs, which would bring down inventories, as well as the upcoming opening of TransCanada Corp.’s Gulf Coast Pipeline, which the market could see as increasing demand for U.S. crude.
The American Petroleum Institute was slated to release its weekly data on U.S. energy supplies later Tuesday at 4:30 p.m. U.S. Eastern time. Evans tipped a decline of between 500,000 and 1.5 million barrels for the week ended Nov. 15, which would snap eight weeks of gains.
Following the API numbers, the U.S. Energy Information Administration was due to issue its more closely watched report on Wednesday.
In other energy-futures trading Tuesday, December gasoline shed a penny, or 0.4%, to $2.65 a gallon, while December heating oil was also 1 cents lower, marking a 0.4% loss to $2.91 a gallon.
December natural gas traded little changed at $3.62 per million British thermal units.
Source : Marketwatch
