BLBG:Oil Trades Near One-Week Low on U.S. Stockpile Gain, European Debt Crisis
Oil traded near the lowest level in a week in New York after a report showed U.S. crude stockpiles surged, indicating fuel demand may be weakening as Europe’s debt crisis threatens to slow the global economy.
Futures were little changed after sliding 2 percent yesterday, the first decline in seven days, as record European Central Bank lending signaled the growing risk of the region’s crisis. The euro slid to the lowest level since January against the dollar, curbing investor demand for commodities priced in the U.S. currency. Crude inventories rose 9.57 million barrels last week, according to the industry-funded American Petroleum Institute. An Energy Department report today was forecast to show supplies fell 2.5 million in a Bloomberg News survey.
“The weakness of the euro was the main driver to pushing all commodities down,” said Ken Hasegawa, a commodity- derivative sales manager at Newedge Group in Tokyo who expects West Texas Intermediate oil to trade from $95 to $110 next year. “We got six days of consecutive gains for WTI. Yesterday was a time for some profit taking.”
Crude for February delivery was at $99.65 a barrel, up 29 cents, in electronic trading on the New York Mercantile Exchange at 10:12 a.m. Singapore time. The contract yesterday fell $1.98 to $99.36 in the biggest decline in two weeks. Prices are up 9.1 percent this year after climbing 15 percent in 2011.
Brent oil for February settlement was down 1 cent at $107.55 a barrel on the London-based ICE Futures Europe exchange. The European contract’s premium to New York crude was $7.90, compared with a record $27.88 on Oct. 14.
Fuel Stockpiles
U.S. inventories of distillate fuels, a category that includes heating oil and diesel, gained 554,000 barrels, while gasoline stockpiles rose 1.86 million barrels, the API’s weekly report showed.
The Energy Department, scheduled to release its inventory data at 11 a.m. today in Washington, a day later than usual because of the Christmas holiday, is forecast to show declines of 650,000 barrels and 500,000 barrels, respectively.
The ECB’s balance sheet soared to a record 2.73 trillion euros ($3.53 trillion) after it lent financial institutions more money last week to keep credit flowing to the economy during the debt crisis, the Frankfurt-based bank said yesterday.
To contact the reporter on this story: Ramsey Al-Rikabi in Singapore at ralrikabi@bloomberg.net
To contact the editor responsible for this story: Paul Gordon at pgordon6@bloomberg.net
