Crude oil fluctuated in New York after orders for U.S. durable goods rose more than forecast and the International Energy Agency moved to release supplies. Futures increased as much as 1.5 percent as the Commerce Department said today that bookings for equipment meant to last at least three years climbed 1.9 percent in May. A 1.5 percent increase was projected, according to a Bloomberg News survey. Oil tumbled 4.6 percent yesterday after the IEA announced the release of 60 million barrels of crude. “The oil market got a little boost from the economic numbers this morning,” said Phil Flynn, an analyst with PFGBest in Chicago. “The release of barrels by the IEA will fill a void of high-quality oil on the European market.” Crude oil for August delivery declined 15 cents to $90.87 a barrel at 10:54 a.m. on the New York Mercantile Exchange. The August contract is down 2.8 percent this week. Brent crude oil for August delivery dropped $1.23, or 1.2 percent, to $106.03 a barrel on the London-based ICE Futures Europe exchange. The U.S. economy grew at a 1.9 percent annual pace in the first quarter, marking the start of what Federal Reserve policy makers project is a temporary slowdown in growth, another report from the Commerce Department showed today. The government last month estimated first-quarter growth at 1.8 percent. “There was a growing worry that the numbers today would be absolutely terrible,” Flynn said. New York futures posted the biggest daily drop in six weeks yesterday after IEA member states agreed to act in response to the drop in exports from Libya. The U.S. Strategic Petroleum Reserve will provide 30 million barrels, European members will supply about 20 million and Asian nations the remainder. Third Coordinated Release It’s the third time the IEA has coordinated the use of emergency stockpiles since the agency was founded in 1974. The first was during the 1991 Persian Gulf War and the second was after Hurricane Katrina in 2005. The Paris-based IEA is an energy policy adviser to 28 industrialized nations including the U.S., Japan and Germany. “You now have a new factor in the market,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “In the past the strategic reserve was used to make up for a shortage, now it’s being used as a pricing tool. This will add another level of complexity for analysts looking at the market.” The Organization of Petroleum Exporting Countries failed to reach an accord on production increases at a June 8 meeting in Vienna. Saudi Arabia pledged that it and three other Persian Gulf states would keep consumers sufficiently supplied in the absence of an OPEC accord. “We’re still adjusting to yesterday’s announcement,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “The missing piece of the puzzle is what the Saudis think. We don’t know if the Saudis will offset the SPR release with production cuts, or perhaps grumble and continue pumping as much as before.” 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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