Oil declined from the highest level in a week in New York before a government report that may show stockpiles climbed in the US, the world’s biggest crude user.
Futures slipped as much as 0.7 per cent after surging 3.4 per cent yesterday amid increased Middle East tension.
Crude inventories probably rose by 1.5 million barrels last week, according to a Bloomberg survey before an Energy Department report tomorrow. The American Petroleum Institute will release separate supply data today.
London-traded Brent prices are ‘‘still high’’ and Saudi Arabia will work towards ‘‘moderating’’ them, Oil Minister Ali al-Naimi said yesterday.
‘‘US supplies are more than adequate and it’s been like that for some time,’’ said David Lennox, a resource analyst at Fat Prophets in Sydney. ‘‘We can’t really see that changing.’’
Crude for November delivery decreased as much as 68 cents to $US91.71 a barrel in electronic trading on the New York Mercantile Exchange and was at $US92.08 at 12.41pm EADT.
The contract gained $US3.06 yesterday to $US92.39, the highest close since October 1. Prices are down 6.8 per cent this year.
Brent oil for November settlement slipped 30 cents, or 0.3 per cent, to $US114.20 a barrel on the London-based ICE Futures Europe exchange. It climbed 2.4 per cent to $US114.50 yesterday.
The European benchmark grade’s premium to West Texas Intermediate was at $US22.12. The spread reached $US22.49 on Monday, the widest since October 2011.
Middle East tension
Oil is declining in New York after reaching technical resistance along its middle Bollinger Band yesterday, according to data compiled by Bloomberg.
Futures yesterday halted their advance near this indicator, at around $US92.93 a barrel today. Sell orders tend to be clustered near chart-resistances levels.
Saudi Arabia, the world’s biggest oil exporter, wants to see Brent closer to $US100 a barrel, Mr al-Naimi told reporters in Riyadh yesterday before a conference of oil ministers from the Gulf Co-operation Council.
The six countries in the council accounted for 24 per cent of the world’s crude supplies last year, according to BP’s Statistical Review of World Energy.
Oil prices surged yesterday after Turkish guns fired on Syrian artillery units and tanks for a sixth day. The attacks follow the deaths of five people struck by a Syrian shell in Turkey on October 3.
Tension between the two countries has risen with the 19-month rebellion against Syrian President Bashar al-Assad’s government, as Turkey has offered support for the rebels.
President Barack Obama signed an executive order yesterday approving a framework for tighter sanctions on Iran, White House spokesman Tommy Vietor said in an emailed statement.
Iran is grappling with restrictions on its energy exports imposed by Western countries that allege it is building nuclear weapons.
US Fuel supplies
US gasoline stockpiles probably rose 375,000 barrels last week, according to the median estimate of 10 analysts in the Bloomberg survey before the Energy Department report.
Distillate supplies, a category that includes heating oil and diesel, probably fell 250,000 barrels.
The department is releasing the data a day later than usual because of the Columbus Day holiday, which was on Monday.
Gasoline rose yesterday as US refinery shutdowns threatened supplies, boosted spot values in New York Harbour and sent California pump prices to record highs.
Futures for November delivery climbed 2.3 per cent to $US2.9587 a gallon on the New York Mercantile Exchange. The contract was at $US2.9591 today.
Immediate-delivery gasoline in New York Harbor traded at 24.5 cents above futures yesterday, the most for this time of year in at least a decade.
The motor fuel at the pump climbed to $US4.671 a gallon in California, according AAA, the largest US motoring organisation.
Valero Energy said yesterday that it is blending winter gasoline at its California refineries in Benicia and Wilmington after the state’s governor, Jerry Brown, directed regulators to allow the making of the fuel grade earlier than usual to boost supplies.
Winter gasoline isn’t normally sold until after October 31 and the end of the smog season because it reduces air quality more than the summer grade.