BLBG:Oil Falls for a Second Day on Rising U.S. Supplies, Fed Minutes
Oil fell for a second day in New York after a report showed U.S. crude stockpiles rose and Federal Reserve minutes indicated central bankers saw no need for more monetary stimulus unless economic growth slows.
Futures dropped 0.4 percent extending yesterday’s decline, the first in three days. Crude supplies climbed the most since December, data from the American Petroleum Institute showed. A Department of Energy report today may show inventories rose to a seven month high, according to a Bloomberg News survey. The March Fed minutes signaled less urgency to add stimulus with no sentiment expressed for further easing.
“While we see builds, we’ll see the crude market under pressure,” said Jonathan Barratt, chief executive of Barratt’s Bulletin, a commodity markets newsletter in Sydney. “Let’s see what the DOE data says, it’s all suggesting the economy is slowing at a time when the Fed is putting the brakes on any form of easing. It could create volatility in the market.”
Oil for May delivery fell as much as 39 cents to $103.62 a barrel in electronic trading on the New York Mercantile Exchange. It was at $103.66 at 12:14 p.m. Sydney time. The contract yesterday declined $1.22, or 1.2 percent, to $104.01, the lowest close since March 30. Prices are 4.9 percent higher this year.
Brent oil for May settlement was at $124.46 a barrel, down 40 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to New York-traded West Texas Intermediate was at $20.80, compared with $20.85 yesterday, the most since Oct. 21.
Oil Stockpiles
Crude supplies increased 7.8 million barrels last week, the most since Dec. 23, data from the industry-funded API showed. An Energy Department report today may show they rose 2.5 million barrels to 355.9 million, the highest since August, according to the median of 11 analyst estimates in the Bloomberg survey.
Gasoline inventories dropped 4.5 million barrels, according to API data. They are forecast to slip 1.4 million barrels, the survey shows. Distillate stockpiles, a category that includes diesel and heating oil, fell 1.4 million barrels compared with an estimate for a 500,000 barrel decline in the DOE report.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
U.S. gasoline sales climbed 2.6 percent last week from the prior seven days amid a seasonal pickup in demand, according to MasterCard Inc. (MA)’s SpendingPulse report yesterday. Drivers bought 8.87 million barrels a days of gasoline in the seven days ended March 30, up from 8.65 million a week earlier. Consumption was down 3.5 percent from a year earlier, the 31st consecutive decline. It was the smallest year-over-year drop since Jan. 13.
The Fed also affirmed its plan, first announced in January, to hold interest rates near zero through late 2014 as the economy’s improvement may not be sufficient to lower the outlook for coming years, according to the March 13 minutes released yesterday in Washington.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
