BLBG:Brent Declines A Second Day As U.S. Stockpile Gain Likely
Brent oil declined to its lowest in five months before a report that may show stockpiles climbed to the highest level since 1990 in the U.S., the world’s biggest crude user.
Brent futures dropped to $105 a barrel in London for the first time since Dec. 20. In the U.S., prices are heading for the biggest monthly drop in more than three years. American crude inventories rose 800,000 barrels to 383.3 million last week, according to the median estimate of eight analysts in a Bloomberg News survey before the Energy Department report tomorrow. Economic confidence in the euro area fell more than forecast, a European Commission report today showed.
“We’re seeing a temporary, seasonal demand-side weakness with very ample supplies,” said Andy Sommer, a senior trader at EGL AG in Dietikon, Switzerland, who correctly predicted last month that prices would fall. “The European impact on global oil demand is not that big,” and prices will rebound in the second half as the economy recovers, he said.
Brent oil for July settlement fell as much as $1.68, or 1.6 percent, to $105 a barrel on the London-based ICE Futures Europe exchange. It was at $105.10 at 11:28 a.m. London time. The European benchmark contract’s premium to West Texas Intermediate was at $15.84, compared with $15.92 yesterday.
Crude for July delivery decreased as much as $1.37 to $89.39 a barrel in electronic trading on the New York Mercantile Exchange and was at $89.47 at 11:28 a.m. London time. The contract yesterday slid 10 cents to $90.76, the lowest close since May 24. Prices are down 15 percent this month, the biggest drop since December 2008.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net
