Crude oil declined for the first time in three days on speculation that a report may show U.S. inventories climbed for the 15th time in 17 weeks. Oil fell as much as 2 percent before an Energy Department report that will show stockpiles rose 1.5 million barrels last week, according to a Bloomberg News survey. A gain of that size would leave supplies within 1 percent of a two-year high. Gasoline advanced 9.4 percent the prior two days on concern flooding on the Mississippi River will disrupt output. “Expectations of another inventory gain are weighing on the market,” said Jason Schenker, president of Prestige Economics, an energy advisory firm in Austin, Texas. “Gasoline advanced the last two days, pulling crude higher, on concern about the Mississippi floods. There’s a growing realization that any refinery shutdown will be temporary and cut crude demand.” Crude for June delivery declined $2.05, or 2 percent, to $101.83 a barrel at 9:35 a.m. on the New York Mercantile Exchange. Prices are up 33 percent in the past year. Brent crude for June settlement slipped $1.47, or 1.3 percent, to $116.16 a barrel on the London-based ICE Futures Europe exchange. Yesterday, the industry-funded American Petroleum Institute said crude oil inventories jumped 2.95 million barrels to 367.2 million last week. The Energy Department will probably report that gasoline stockpiles dropped 750,000 barrels, according to the median of 17 analyst responses in a Bloomberg News survey. The department’s weekly report is scheduled for release at 10:30 a.m. in Washington. Demand Forecast The Organization of Petroleum Exporting Countries said oil prices are more in line with market conditions after last week’s 15 percent collapse, and maintained its 2011 demand forecast. The world will need an average of 29.87 million barrels of crude a day from OPEC’s 12 members this year, about 400,000 a day more than last year because of “roaring” economic growth in China, the group said in its monthly market report today. China’s consumer prices climbed 5.3 percent in April from a year earlier, according to the statistics bureau in Beijing. That’s higher than the government’s 4 percent full-year target and above the 5.2 percent median forecast in a Bloomberg News survey of economists. The country’s central bank will increase interest rates once more this year, adding to four since mid-October, another Bloomberg News survey showed. Officials have boosted banks’ reserve requirements and reined in credit growth from record levels in 2009 and 2010. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.

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