Oil fell before an Energy Department report likely to show that U.S. stockpiles increased because of lower demand in the world’s largest energy consumer. U.S. crude oil inventories gained 1.5 million barrels last week, according to the median analyst estimate in a Bloomberg News survey before today’s report. The American Petroleum Institute yesterday said stockpiles rose 4.66 million barrels to 349.9 million barrels, the most in almost two years. “We are seeing a bit of caution ahead of the Energy Department numbers, especially after the API report yesterday,” said Peter Luxton, an energy analyst at Informa Global Markets. “It is a general lack of product demand causing refinery utilization to come down.” Crude oil for April delivery fell as much as 91 cents, or 1.9 percent, to $48.25 a barrel and traded at $48.56 a barrel on the New York Mercantile Exchange at 12:24 p.m. in London. Yesterday, April futures rose 3.8 percent to $49.16 a barrel, the highest settlement since Dec. 1. Prices have gained 8.4 percent so far this year. Speculation that output cuts by the Organization of Petroleum Exporting Countries are leading to lower oil supplies and declining stockpiles helped push prices up 6 percent so far this week. These gains could be eroded if the Energy Department report shows a build in inventories similar to that reported by the API, according to Eugen Weinberg, senior commodity analyst at Commerzbank AG in Frankfurt. Run at $50 “On the other hand, if the API data are not confirmed, the price of WTI is likely to take a fresh run at the $50 hurdle,” he said. OPEC agreed March 15 to maintain earlier production quotas, saying it needed to reduce supply by a further 800,000 barrels a day to complete promised supply cuts. Gasoline stockpiles probably dropped 1.5 million barrels from 212.5 million the previous week, according to the Bloomberg survey. The department is scheduled to release its weekly report today at 10:30 a.m. in Washington. Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose 1 million barrels from 145.4 million, the survey showed. “Lower prices are beginning to shift the demand pattern for gasoline,” which could help improve refiners’ margins, Informa’s Luxton said. “In the U.S. in the last few weeks, there were signs that gasoline demand is increasing.” Brent crude oil for May settlement fell as much as 99 cents, or 2.1 percent, to $47.25 a barrel and traded at $47.81 on London’s ICE Futures Europe exchange at 12:25 p.m. local time. Homebuilding Rebound Oil futures rose yesterday on an unexpected rebound in homebuilding and speculation that the Federal Reserve will outline plans to bolster the U.S. economy. Energy prices may have risen too far, too fast on signs of economic recovery, Edward Meir, an analyst with MF Global Ltd. in Connecticut, said in a report today. “Despite the good U.S. numbers on housing, it will take far more than one set of monthly figures to turn sentiment, let alone the economy, around,” he said in the report. Saudi Arabia’s oil minister Ali al-Naimi today said he expects oil demand to rise again “whenever economic growth resumes.”

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