BLBG:Oil Drops From Five-Week High as U.S. Stockpiles Advance
Oil slid from the highest level in five weeks as increasing crude stockpiles in the U.S. and uncertainty ahead of elections in three European countries fanned concern that global demand may weaken.
Futures in New York dropped as much as 0.5 percent. U.S. crude inventories rose 2.04 million barrels last week, the fifth gain in six weeks, the American Petroleum Institute said yesterday. France, Italy and Greece will hold elections this weekend. Prices advanced 1.2 percent yesterday after an index of U.S. manufacturing rose at the fastest pace in 10 months.
“Concerns about Europe continue to weigh on risk,” Michael Hewson, a London-based analyst at CMC Market, which handles about $240 million a day in U.S. crude contracts, said today in an e-mailed response to questions. “There’s still a lot of uncertainty ahead of this weekends’ political events in France, Greece and Italy. Economic data continues to disappoint in Europe.”
Crude for June delivery slid as much as 53 cents to $105.63 a barrel in electronic trading on the New York Mercantile Exchange. It was at $105.72 at 8:57 a.m. London time. The contract yesterday gained $1.29 to $106.16, the highest close since March 27. Futures are up 7 percent this year.
Brent oil for June settlement on the London-based ICE Futures Europe exchange was down 19 cents at $119.47 a barrel. The European benchmark contract was at a $13.75 premium to New York futures, compared with $13.31 yesterday, the narrowest gap based on closing prices since Jan. 31.
Oil Supplies
U.S. crude supplies probably climbed to 375.5 million barrels in the week ended April 27, the highest in more than 21 years, according to the median estimate of 11 analysts surveyed by Bloomberg News. The Energy Department will release its weekly report at 10:30 a.m. in Washington today.
Gasoline inventories are expected to have fallen 1.5 million barrels, extending a 10-week run of declines, the survey showed. The API yesterday said supplies decreased 3.9 million barrels.
Gasoline futures for June delivery were up 0.16 percent at $3.1013 a gallon in New York, after losing 2.7 percent yesterday, the most since Feb. 28.
The Institute for Supply Management’s factory index climbed to 54.8 last month, according to the Tempe, Arizona-based group’s report yesterday. The reading exceeded the most optimistic forecast of 79 economists surveyed by Bloomberg and was the highest since June. Readings greater than 50 signal growth.
China’s Factories
A Chinese manufacturing index rose in April, signalling that a rebound in the world’s second-biggest economy may help to offset constraints on global growth from austerity measures in Europe.
The 49.3 final reading of a purchasing managers’ index from HSBC Holdings Plc and Markit Economics today compares with a preliminary 49.1 reported on April 23 and a final 48.3 in March. A separate index released yesterday by China’s statistics bureau and logistics federation was at 53.3, indicating the fastest growth in a year.
“China data are still in contraction territory on HSBC measure, which continues to paint a mixed picture,” Hewson said.
To contact the reporters on this story: Sherry Su in London at lsu23@bloomberg.net; Yee Kai Pin in Singapore at kyee13@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
