Oil fell from a six-month high on speculation that last week’s 10 percent advance will be undone by rising crude stockpiles. Oil supplies remain at the highest since 1990, even as some economic data begin to point to a recovery and possible increase in demand for fuel. Crude followed equity markets lower today, reversing gains last week after the U.S. economy lost fewer jobs than expected. Oil may be due for a “crash” as supplies increase and demand falls, Stephen Schork, publisher of the Schork Report, said today. “From a purely fundamental point of view, prices have run too fast to these high levels,” said Andy Sommer, an analyst at Elektrizitaets-Ges Laufenburg AG in Dietikon, Switzerland. “A correction should be on the cards.” Crude oil for June delivery fell as much as $1.59, or 2.7 percent, to $57.04 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $57.13 at 12:43 p.m. in London. The contract rose 3.4 percent to $58.63 a barrel on May 8, the highest settlement since Nov. 11. U.S. crude oil inventories rose to 375.3 million barrels during the week ended May 1, the highest since 1990, according to a May 6 report from the Energy Department. The report on last week’s stockpile is due May 13. “Crude stockpiles are increasing and could derail the recent gains, perhaps once the recent infatuation with equities is over,” Edward Meir, an analyst at MF Global Ltd. in Connecticut, said in an e-mailed report today. Hedge Funds Hedge-fund managers and other large speculators changed bets for a second time last week on the direction of oil prices, according to U.S. Commodity Futures Trading Commission data. Speculative short positions, or bets prices will fall, outnumbered long positions by 11,285 contracts on the New York Mercantile Exchange on May 5, the commission said May 8. A week earlier, traders were anticipating rising prices. “Supplies are high and rising and demand is low and falling, yet the Nymex is moving higher,” the Schork Report said. “It is going to crash, but for the time being, we would rather hop onto the bandwagon rather than fight the tape.” Brent crude oil for June settlement declined as much as $1.59, or 2.7 percent, on London’s ICE Futures Europe exchange. It traded at $56.61 a barrel at 12:45 p.m. local time. New York oil futures plunged to a four-year low of $32.40 on Dec. 19. Prices have gained 39 percent in the past two months as measures to restore global credit markets lifted global commodities and equity markets. Betting on OPEC The Organization of Petroleum Exporting Countries will review its output levels on May 28. Iran, the group’s second- largest member, will seek a price of $70 a barrel, the nation’s Oil Ministry said May 9, citing OPEC governor Mohammad Ali Khatibi. “With prices slightly below $60, OPEC will not cut output again,” said Sommer. “Prices are more or less at a level that they can live with in the short term.” Saudi Aramco, the world’s biggest state oil company, maintained cuts in contracted supplies of crude oil to Asia in June, refinery officials said. The Dhahran, Saudi Arabia-based producer will keep in place reductions in shipments to refiners of between 10 percent and 15 percent from levels agreed under annual contracts, according to officials at processors in China, Japan, Taiwan and South Korea who received notices from the company. The officials asked to remain anonymous, citing confidentiality agreements.

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