MW: Oil edges lower on weak earnings, supplies forecast
Crude-oil futures fell Tuesday for a second session as gloomy earnings from DuPont and Caterpillar Inc. fueled economic worries and as analysts forecast another buildup in U.S. oil inventories.
Crude for May delivery, the front-month contract which expires today, fell 6 cents, or 0.1%, to $45.82 a barrel in electronic trading on Globex.
Crude oil for June delivery dropped 36 cents, or 0.7%, to $48.15 a barrel. The June contract registered much more volume.
U.S. stock futures pointed to a lower opening on Wall Street on Tuesday, as blue chips DuPont , Merckand Caterpillar cut their 2009 profit or sales estimates in a largely bleak wave of earnings reports.
On Monday, May crude futures slumped 8.8%, posting the biggest one-day loss in seven weeks and tracking sharp declines in U.S. stocks.
"Given the high degree of correlation between crude oil and the S&P 500 (some 84% since early March), Monday's steep 290-point drop in the Dow also did its fair share of damage to the crude oil markets," said Edward Meir, an analyst at MF Global.
With builds in oil stocks expected, "we suspect the path of least resistance to be somewhat lower still, at least until the end of the week, when more macro numbers out of the U.S. have a shot at changing sentiment," Meir said.
The American Petroleum Institute will release data on petroleum supplies late on Tuesday afternoon. The Energy Information Administration will report its more closely watched data at 10:30 a.m. on Wednesday.
Analysts surveyed by Platts expect U.S. crude inventories increased by 3 million barrels last week, rising from their highest level in nearly two decades
They also project a decline of 860,000 barrels in gasoline stocks as well as a drop of 1.25 million barrels in distillate stocks, according to the Platts survey.
Also on Globex, May reformulated gasoline was flat at $1.41 a gallon and May heating oil was unchanged at $1.33 a gallon.
May natural gas futures fell 8 cents to $3.46 per million British thermal units.