Oil price weakensas glut grows

Oil is poised for the lowest quarterly average price since the start of 2009 as industry data showed US crude stockpiles increased and Opec’s second-largest producer boosted output.

US oil inventories rose by 4.6m barrels last week, the American Petroleum Institute reported yesterday, while Iraq boosted crude output 17% this month compared with a year earlier, oil minister Adel Abdul Mahdi said.

Oil has plunged more than a quarter from this year’s closing peak in June amid speculation a global glut will be prolonged.

US crude stockpiles remain almost 100m barrels above the five-year seasonal average even as producers reduced output in six of the last seven weeks.

Opec pumped more than its 30m-barrel daily quota for the 15th consecutive month in August.

“The quarter is ending with weaker prices influenced by higher supplies after a relatively strong start. In the next quarter, a lot of the focus is going to be on what Opec does or does not do in its December meeting,” said Petromatrix managing director Olivier Jakob.

Brent for November settlement fell 9c to $48.14 a barrel on the London-based ICE Futures Europe exchange at one stage.

Prices have averaged $51.30 this quarter.

Rising output from some Opec nations is adding to the US supplies.

Iraq accounted for about 4.6% of global output this month, compared with 3.6% a year ago.

Easing demand in Asia, the world’s biggest demand centre, refiners cut crude imports for loading in October by 7% from a month earlier to 1.48m barrels a day, the lowest in more than three years, according to a Bloomberg survey of 10 traders and analysis of loading programs.

More than one million barrels a day of Asian refining capacity is scheduled to undergo maintenance this month and the next, easing demand for oil, Ehsan Ul-Haq, senior analyst at KBC Energy Economics, said.

The Bloomberg Commodity Index has tumbled about 15% since June 30, headed for its worst quarterly performance since the end of 2008.

The measure of returns for 22 raw materials fell to its lowest level since 1999 in August on fears about the strength of the economy in China, the world’s largest consumer of commodities.