BLBG: Oil Falls for a Seventh Day as Demand in U.S. and Europe Slows
By Ann Koh
May 19 (Bloomberg) -- Crude oil dropped for a seventh day, its longest losing streak in five months, on concern gasoline demand is slowing in the U.S. and as investors delayed buying commodities on speculation the European debt crisis will worsen.
Oil slumped to its weakest level in seven months after the euro touched a four-year low earlier today as European nations struggle to meet austerity requirements. Crude prices also fell after an American Petroleum Institute report showed gasoline inventories in the world’s biggest energy consumer rose 981,000 barrels last week.
“Sometimes people are focusing a little too much on the good aspects of Asia, we need to remember that the north Atlantic economies are really important for oil,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in a Bloomberg Television interview from Melbourne. “And both the U.S. and Europe are very weak fundamentally.”
Crude oil for June delivery dropped as much as $1.51, or 2.2 percent, to $67.90 a barrel in electronic trading on the New York Mercantile Exchange, the lowest intraday level since Sept. 30. It was at $68.87 at 1:40 p.m. in Singapore. Yesterday, the contract fell 67 cents to $69.41 a barrel, the lowest settlement since Sept. 29.
The dollar traded at $1.2219 per euro at 1:28 p.m. Singapore time, from $1.2202 in New York yesterday. The euro fell yesterday after Germany’s ban on some speculative sales triggered concern that Europe’s debt crisis will worsen.
Crude Supplies
The Organization of Petroleum Exporting Countries is “tense” about the decline in oil prices and may call an extraordinary meeting if the fall continues, Angolan Oil Minister Jose Maria Botelho de Vasconcelos said yesterday.
An Energy Department report today will probably show that U.S. inventories of crude oil climbed for the 15th time in 16 weeks. Stockpiles rose 500,000 barrels in the seven days ended May 14 from 362.5 million the week before, according to the median of 15 analyst estimates in a Bloomberg News survey.
Supplies of distillate fuel, a category that includes heating oil and diesel, climbed 1 million barrels from 153.8 million, according to the survey. Gasoline stockpiles declined 900,000 barrels from 222.1 million the prior week.
Crude supplies declined 794,000 barrels last week, the American Petroleum Institute report said yesterday.
Trend ‘Still Down’
“The trend is still down for the price of oil,” said Mike Sander, an investment adviser a Sander Capital Advisors in Seattle. “As long as the euro continues to sink like a rock, the price of oil will remain on the defensive. The June contract saw oil break through support at the $70 barrel level and we could see oil hit $67.”
The Petroleum Institute collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Brent crude oil for July delivery dropped as much as $1.22 or 1.6 percent, to $73.21 on the London-based ICE Futures Europe exchange, and traded at $74.12 a barrel at 1:45 p.m. Singapore time. Yesterday, the contract declined 67 cents, or 0.9 percent, to $74.43.
To contact the reporter on this story: Ann Koh in Singapore at akoh15@bloomberg.net
