BLBG: Oil Falls for a Fifth Day on Forecast Gains in U.S. Supplies
By Alexander Kwiatkowski and Grant Smith
April 13 (Bloomberg) -- Oil declined for a fifth day amid forecasts of an 11th consecutive weekly gain in U.S. crude stockpiles, signaling that oversupply may persist in the world’s largest energy user.
U.S. crude oil supplies probably rose 1.15 million barrels as imports climbed, according to a Bloomberg News survey. It would be the longest stretch of increases in five years. The Energy Department is due to release its weekly report at 10:30 a.m. tomorrow in Washington. Oil also fell as the International Energy Agency boosted its forecast for non-OPEC supplies.
“The current price is way ahead of fundamentals,” said Eugen Weinberg, senior analyst with Commerzbank AG in Frankfurt. “It reflects positive future developments too much. As investors become aware of economic risks, they might trim their bets.”
Crude oil for May delivery dropped as much as 91 cents, or 1.1 percent, to $83.43 a barrel in electronic trading on the New York Mercantile Exchange. It was at $83.62 at 12:40 p.m. London time. Brent crude dropped 22 cents to $84.55 on the London-based ICE Futures Europe exchange.
Non-OPEC producers, accounting for about 60 percent of the world’s supplies, will raise output by 600,000 barrels a day this year to average 52 million barrels a day, the IEA said in its monthly market report today. That’s 220,000 barrels a day more than estimated last month. The agency left its forecast for global oil demand in 2010 little changed, 30,000 barrels a day higher than in last month’s report.
Fuel Inventories
Oil inventories are at their “highest in history,” and there is no shortage of supply, Qatari Energy Minister Abdullah Bin Hamad al-Attiyah said yesterday at a press conference in Doha. Qatar is the second-smallest producer in the Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world’s oil.
It’s “premature” to declare that the current slump is over, the National Bureau of Economic Research’s Business Cycle Dating Committee said in a statement on its Web site yesterday. The body is responsible for determining when U.S. recessions begin and end.
U.S. gasoline inventories probably dropped 1 million barrels from 222.4 million the prior week, according to the survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, rose 1 million barrels from 145.7 million the prior week, said the survey.
The industry-funded American Petroleum Institute will issue its own weekly report at 4:30 p.m. in Washington D.C. today.
Brent Overtakes Nymex
“Bulls are correct in their assumption that demand is recovering on a global level,” said Stephen Schork, president of the Schork Group Inc., in a daily report. “On the other hand, the bears are vindicated with crude oil supplies 11 percent above the 2004-2008 average.”
Schork is maintaining a neutral outlook for prices until levels “settle significantly distant from $85.”
The Brent price overtook the Nymex price for the first time since Dec. 21, based on the May contracts. The ICE future is trading at 94 cents a barrel premium to New York.
Brent May futures expire on April 15. The more active June contract was at $85.48 a barrel, down 23 cents, at 12:39 p.m. local time.
To contact the reporter on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.net
