SFG: Oil Trades Near One-Week Low After Unexpected Gain in Supplies
July 29 (Bloomberg) -- Crude oil traded near a one-week low in New York on an unexpected increase in U.S. supplies as imports jumped to the highest level in almost four years.
Oil dropped 0.7 percent yesterday after an Energy Department report showed crude inventories climbed 7.31 million barrels to 360.8 million in the week ended July 23, the biggest gain since March 19. Analysts in a Bloomberg News survey had forecast stockpiles would tumble to a four-month low. Imports climbed to the highest level since August 2006.
"Sentiment is very mixed," Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney, said by telephone. "The oil market looks to be nicely controlled within a range. The fundamental story is not clear. We saw inventory builds at a time when we didn't expect them to rise."
Crude oil for September delivery was at $76.95 a barrel, down 4 cents, in electronic trading on the New York Mercantile Exchange at 9:37 a.m. Singapore time. Yesterday, the contract fell 51 cents to $76.99. Futures have dropped 3.1 percent so far this year.
Imports rose 1.18 million barrels, or 12 percent, to 11.2 million, the highest level since the week ended Aug. 25, 2006. Crude oil supplies were forecast to decline 1.73 million barrels, according to the 16 analysts in the Bloomberg survey.
"Any increase in inventories tends to put pressure on the price of oil to pull back," said Mike Sander, an investment adviser at Sander Capital Advisors in Seattle. "The price of oil is at a stand-still for now."
Durable Goods
Oil prices also fell yesterday after total orders for durable goods, those meant to last at least three years, unexpectedly dropped 1 percent amid a slump in demand for aircraft. The Commerce Department report deepened concern that the economic recovery may be flagging and limiting fuel demand.
Economists forecast total durable goods orders would climb 1 percent, according to the median of 76 projections in a Bloomberg News survey. The Commerce Department revised May's decline to 0.8 percent from the previously reported 0.6 percent.
The Federal Reserve said yesterday that growth slowed in some areas over the past two months, dragged down by commercial real estate and the expiration of a tax credit for homebuyers. In its Beige Book, the Fed said "activity has continued to increase, on balance." Two of the 12 districts reported slower growth and two said the economy "held steady."
Brent crude for September settlement traded at $75.86 a barrel, down 20 cents, on the London-based ICE Futures Europe exchange at 9:11 a.m. Singapore time. Yesterday, the contract fell 7 cents, or 0.1 percent, to settle at $76.06.
