MW: Crude oil falls as excessive inventories weigh
Crude-oil futures fell Monday for the first session in four, declining from their highest level in six months on worries that the recent rally will be reversed by rising oil inventories.
Crude for June delivery was down $1.33, or 2.3%, to $57.30 a barrel in early North American electronic trading. It ended at $58.63 Friday, the highest closing price for a front-month contract since Nov. 11.
"Prevailing economic conditions do not support a sustainable high oil price," said Barbara Lambrecht, an analyst at Commerzbank, in a note.
Oil rallied more than 10% last week, despite government data showing U.S. crude inventories rose to the highest level in nearly 19 years.
Crude inventories in the U.S., the biggest oil consumer, rose to more than 375 million barrels in the week ended May 1, the Energy Information Administration reported last week. That's the highest level since September 1990.
Meanwhile, oil demand also dropped sharply compared with a year ago, the EIA reported. The EIA will report its latest petroleum data Wednesday.
"It has been a long time since any economic data signaled a near term rise in petroleum demand and there isn't any now," said James Williams, an economist at energy research firm WTRG Economics. "It is difficult to see prices staying near the current level for more than a few weeks or months."
Also in energy trading, June-reformulated gasoline fell 4.6 cents, or 2.7%, to $1.6595 a gallon, and June heating oil sank 2.8 cents, or 1.8%, to $1.4914 a gallon.
Meanwhile, natural gas for June delivery fell 6.1 cents, or 1.5%, to $4.248 per million British thermal units. Natural gas rallied 21.6% last week.
