BLBG:Oil Falls a Seventh Day, Longest Run of Losses Since 2009
Oil fell for a seventh day in New York, its longest run of declines since December 2009, as hopes for a solution to Europe’s debt crisis receded, U.S. supplies rose and Chinese imports fell.
West Texas Intermediate oil fell as much as 0.7 percent. Crude inventories rose 3.7 million barrels last week to 379.5 million, the highest level since 1990, even as fuel supplies shrank, Department of Energy data showed. The euro pared gains against the dollar as Greece struggled to form a government and the cost of insuring against a Spanish debt default increased to a record. China, the world’s second-biggest oil consumer, reduced net crude imports to the least in fourth months.
“Prices have come down amid further Europe jitters, the stronger dollar, an absence of additional bad news in the Iranian situation and lower Chinese imports,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt. “But for WTI at least the drop might have been overdone.”
WTI for June delivery fell as much as 66 cents to $96.15 a barrel in electronic trading on the New York Mercantile Exchange and was at $96.24 at 10:56 a.m. London time. The contract yesterday slid 20 cents to $96.81, the lowest close since Feb. 2. Prices have fallen 2.6 percent this year.
Brent oil for June settlement fell 15 cents, or 0.1 percent, to $113.05 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $16.81, compared with $16.39 yesterday.
Technical Indicators
New York oil’s 14-day relative strength index fell to 30, a reading that indicates further losses may not be sustained, according to data compiled by Bloomberg. Prices have yet to settle lower than the 200-day moving average after trading below that level the past three days, showing there is technical support. The indicator is around $96.28 a barrel today.
Crude stockpiles at Cushing, Oklahoma, the delivery point for WTI, rose 1.16 million barrels to a record 44.1 million, according to the Department of Energy report.
Fuel inventories fell and refineries operated at 86.4 percent of capacity, the highest level since the week ended Dec. 2. Gasoline supplies slid 2.61 million barrels, more than three times the 750,000-barrel decrease forecast. Stockpiles of distillate fuel, a category that includes heating oil and diesel, dropped 3.25 million barrels.
Debt Crisis
Oil’s decline this week is because of “a combination of factors,” said Diego Parrilla, chief investment officer at NARECO Advisors in Singapore. “The inventories play some part. It’s the general macroeconomic sentiment as the situation in Europe has deteriorated.”
China’s exports rose less than estimated in April as a faltering global economy weakened demand for its goods. Imports climbed 0.3 percent, customs data also showed. Economists surveyed by Bloomberg forecast a gain of 10.9 percent.
The country bought 22.21 million metric tons, or 5.4 million barrels a day, more than it exported in April, data published today on the website of the Beijing-based General Administration of Customs show. That’s the least since December.
Credit-default swaps on Spanish debt rose 21 basis points to a record 520 yesterday, according to data compiled by Bloomberg. Greece’s political turmoil was set to enter a fourth day with coalition talks deadlocked after elections failed to deliver a majority for any party.
The euro was at $1.2934, after falling to $1.2912 yesterday, the lowest level since Jan. 23. The European Union accounted for 16 percent of the world’s oil consumption in 2010, according to BP Plc (BP/)’s Statistical Review of World Energy.
London’s oil futures market was busier than its New York counterpart for the first time in at least 17 years last month. Investors traded 11.3 million Brent futures on the ICE Futures Europe exchange in April, compared with 10.6 million West Texas Intermediate contracts, according to data compiled by Bloomberg. That was the first month the London future had higher volumes than New York’s since 1995, the earliest period for which Bloomberg has figures.
To contact the reporters on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
