BLBG: Oil Falls From Two-Month High on Speculation Stockpiles Gained
Oil fell from a two-month high in New York on speculation U.S. stockpiles gained last week because of lower demand in the world’s largest crude consumer.
Crude oil inventories climbed 1 million barrels in the week ended March 13 from 351.3 million barrels, according to estimates in a Bloomberg survey before an Energy Department report tomorrow. Algerian Oil Minister Chakib Khelil said OPEC’s compliance with quotas will improve to about 95 percent by the time the group meets in May.
“We have very high crude oil inventories in the U.S.” said Sintje Diek, an HSH Nordbank analyst in Hamburg. “We still have very weak oil demand. We will remain in this trading range of $45 to $50 a barrel for the coming weeks.”
Crude oil for April delivery fell as much as 82 cents, or 1.7 percent, to $46.53 a barrel in electronic trading on the New York Mercantile Exchange. It was at $46.94 a barrel at 12:19 p.m. London time.
Yesterday, April futures rose $1.10 to $47.35 a barrel, the highest settlement since Jan. 6. Prices have gained 5.1 percent this year. Crude in New York tumbled from a record $147.27 a barrel in July because of the economic contraction in major consuming countries.
OPEC agreed to hold output targets steady at its meeting in Vienna on March 15 on concern higher prices could harm an ailing global economy. Ministers pledged to tighten compliance with record cutbacks agreed on last year after crude fell more than $100 from July’s record.
“OPEC cuts will take effect with time and support a gradual rise in prices going forward,” Commerzbank AG analyst Eugen Weinberg said in a report today. OPEC’s decision not to trim output again has “not had any negative implications for oil prices,” he said.
Brent crude oil for May settlement traded at $46.09 a barrel, down 0.8 percent at 12:03 p.m. local time on London’s ICE Futures Europe exchange. It earlier fell as much as $1.24, or 2.7 percent, to $45.22 a barrel.
Saudi Arabia, the world’s biggest oil exporter, is the only member to cut more output than agreed last year, according to a monthly OPEC report released on March 13. Iran and Nigeria have made good on only about half of their promised reductions, the report showed.
Saudi Arabia is willing to keep oil output below its OPEC quota level of about 8 million barrels a day unless consumers want more, Saudi Arabian Oil Minister Ali al-Naimi said yesterday.
