WTI Crude Declines to Pare Biggest Weekly Advance Since June

West Texas Intermediate fell for the first time in seven days as some investors speculated the biggest weekly advance since June is excessive.

Futures slid as much as 0.5 percent in New York after rising 2.4 percent yesterday on a drop in U.S. jobless claims. Prices dropped after failing to settle above a technical resistance level. WTI may advance next week on speculation that the European Central Bank will cut its key interest rate to a record low, a Bloomberg survey showed. Brent crude’s premium to WTI fell below $10 a barrel for the first time in 15 months.

“It’s profit-taking after the big gains,” said Tetsu Emori, a commodity fund manager at Astmax Asset Management Inc. in Tokyo. “The trend upward is quite strong. This should be temporary.”

WTI for June delivery slid as much as 48 cents to $93.16 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.31 at 10:24 a.m. Singapore time. The volume of all futures traded was 17 percent below the 100-day average. The contract rose $2.21 to $93.64 a barrel yesterday, posting the highest close since April 10 and the longest run of gains since July. Prices are up 6 percent this week and 1.6 percent this year.

Brent for June settlement declined 43 cents to $102.98 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade was at a premium of $9.67 to WTI. It finished at $9.77 yesterday, the narrowest closing spread since Jan. 3, 2012. The gap reached an intraday record of more than $28 a barrel in October 2011.

(Source: Bloomberg)