Crude oil pared its losses after Saudi Arabian Oil Minister Ali al-Naimi said the country will produce less than its OPEC oil quota in February. U.S. crude stockpiles probably gained 2.25 million barrels in the week ended Jan. 9, according to a Bloomberg survey before an Energy Department report tomorrow.
Crude oil for February delivery fell as much as $1.49, or 4 percent, to $36.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract, down 25 percent in six days, traded for $36.94 a barrel at 1:22 p.m. London time. Oil has plunged more than $100 a barrel in the past six months.
Saudi Arabia is currently producing 8 million barrels a day, roughly level with an 8.051 million barrel a day allocation agreed on Dec. 17, while February production will be lower than the target,” Saudi Oil Minister Ali al-Naimi said as he arrived for a conference in New Delhi today.
Brent crude oil for February settlement was $6.36 more expensive than futures traded in New York, as U.S. oversupply pushed the price gap to its widest since Dec. 19. Brent traded for $43.55 a barrel, 64 cents higher, on London’s ICE Futures Europe exchange at 1:23 p.m. local time.
The U.S. economy will contract 1.5 percent this year, a half percentage point more than projected last month, according to the median of 59 forecasts in the survey taken from Jan. 5 to Jan. 12.
Chinese crude imports rose 9.6 percent to 178.9 million metric tons last year compared with 2007, the slowest rate of growth in three years, the Beijing-based Customs General Administration of China said on its Web site today. Full-year imports increased 9.6 percent to 178.9 million tons.
The Organization of Petroleum Exporting Countries doesn’t need to cut output again so far” and no emergency meeting is planned, Qatari Oil Minister Abdullah bin Hamad al-Attiyah said in Delhi today. OPEC members last week signaled compliance with a record 9 percent production cut announced Dec. 17.
The U.S. Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.
U.S. crude-oil stockpiles probably increased 2.25 million barrels in the week ended Jan. 9 from 325.4 million the week before, according to the median of eight analyst estimates before the Energy Department report. That would be the 14th gain in 16 weeks
This has pushed oil for February delivery to a 35 percent discount to the December future, a market situation known as contango where traders fetch higher prices for contracts for later delivery.
Gasoline stockpiles probably rose 1.5 million barrels from 211.4 million, according to the survey. Supplies of distillate fuel, a category that includes heating oil and diesel, probably climbed 1.5 million barrels from 137.8 million.