BLBG: Crude Oil Declines on Concerns Over Weak Demand, Rising U.S. Inventories
Crude oil fell from the highest level in almost two weeks on concern that demand will be weak, boosting gasoline inventories from a six-month high.
Crude dropped as much as 1.3 percent before an Energy Department report tomorrow that may show gasoline stockpiles climbed 350,000 barrels last week, according to the median of 14 analyst estimates compiled by Bloomberg. Gasoline inventories rose to 226.1 million barrels in the week ended Sept. 17, the highest level since March 12.
“People are looking ahead to the stats tomorrow, and we should expect another build in gasoline,” said Carl Larry, president of Oil Outlooks & Opinions LLC in Houston. “There is a lot of oil in inventory right now and prices are going to have a hard time to stay up.”
Crude for November delivery fell 82 cents, or 1.1 percent, to $75.70 a barrel at 10 a.m. on the New York Mercantile Exchange. It settled at $76.52 yesterday, the highest level since Sept. 14.
Crude stockpiles probably declined 700,000 barrels from the previous week’s 358.3 million, and inventories of distillate fuel, a category that includes heating oil and diesel, may rise 325,000 barrels, the Bloomberg survey showed.
Total petroleum supplies, including crude oil and fuel, climbed to 1.14 billion barrels in the week ended Sept. 17, the highest since at least 1990, according to the department. Total consumption of petroleum products fell 1.8 percent that week.
“The market is waiting for concrete evidence of demand coming back,” said Chris Barber, a senior analyst at Energy Security Analysis Inc. in Wakefield, Massachusetts.
The dollar was little changed against the euro after falling to a five-month low as data showed U.S. home prices rose at a slower pace in July, fueling speculation the Federal Reserve will ease monetary policy.
The dollar was at $1.3466 per euro in New York after dropping to $1.3511, the weakest level since April 20.
The S&P/Case-Shiller index of property values increased 3.2 percent from July 2009, the smallest year-over-year gain since March.
To contact the reporter on this story: Moming Zhou in New York at Mzhou29@bloomberg.net;
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.
