Oil traded near its lowest in a week as confidence in Europe’s economic recovery prospects was offset by signs of accumulating crude supplies in the U.S. Oil pared earlier losses as European finance officials endorsed a bailout for Portugal, causing the dollar to weaken versus the euro and spurring demand for assets priced in the greenback. An Energy Department report tomorrow may show U.S. crude inventories climbed to a two-year high. “The concerns about economic growth and the heavy selling this triggered on the commodities market were overdone,” said Eliane Tanner, a Bank Sarasin & Cie. analyst in Zurich. “Our outlook on oil prices remains positive in the longer term.” Crude for June delivery on the New York Mercantile Exchange was at $97.36 a barrel, down 1 cent, at 12:15 p.m. London time, after earlier sliding to $96.61. It fell 2.3 percent yesterday to $97.37, the lowest settlement since May 6. Prices have risen 39 percent in the past year. Brent oil for July settlement was at $111.21 a barrel, up 37 cents, on the London-based ICE Futures Europe exchange. The June contract expired yesterday, losing $1.10 to $112.73. Chinese oil demand growth may slow this year, according to an official at a unit of the nation’s biggest crude producer. Demand may rise 6.7 percent, slowing from 9.6 percent growth in 2010, Zhang Fuqin, deputy chief engineer at China National Petroleum Corp.’s petroleum and petrochemical engineering institute, said at a conference in Tianjin today. Greek Debt European finance ministers for the first time suggested talks with bondholders on “re-profiling” Greece’s debt repayments, saying last year’s 110 billion-euro ($156 billion) rescue has failed to restore the country to financial health, according to Juncker. His comments suggest ministers’ views are closer to the 85 percent of international investors who, in a Bloomberg poll last week, said Greece is likely to default. An Energy Department report tomorrow may show U.S. crude inventories climbed 1.5 million barrels from 370.3 million barrels, according to the median of 11 analyst estimates in a Bloomberg News survey. Gasoline supplies may increase 1 million barrels, the survey shows. The industry-funded American Petroleum Institute publishes its weekly supply report today. U.S. homebuilding probably held near recession levels, while production at factories, mines and utilities may have increased for a sixth month in April, according to separate Bloomberg News surveys of economists before data released today. To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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