BLBG: Crude Oil Declines After U.S. Consumer Confidence Collapses
Crude oil fell in New York after a report showed that confidence among U.S. consumers plunged to a record low in February, signaling spending will slump further.
Oil retreated after the Conference Board’s index declined more than forecast to 25 this month, the lowest level since data began in 1967, the New York-based research group said today. A government report tomorrow will probably show that U.S. supplies rose 1 million barrels last week, a Bloomberg News survey showed.
“The market continues to come under pressure because of the global recession,” said Gene McGillian, an analyst with Tradition Energy in Stamford, Connecticut. “It will take a long time to work through the supply overhang.”
Crude oil for April delivery fell 18 cents, or 0.5 percent, to $38.26 a barrel at 11:49 a.m. on the New York Mercantile Exchange. Futures advanced as much as 87 cents, or 2.3 percent, to $39.31 before the release of the Conference Board report. Prices are down 14 percent this year.
Federal Reserve Chairman Ben S. Bernanke said the U.S. economy is in a “severe” contraction, and warned the recession may last into 2010 unless policy makers can stabilize the financial system. Bernanke made his remarks to the Senate Banking Committee in Washington.
President Barack Obama will speak to a joint session of Congress tonight about his plans for the economy.
“We are getting doom and gloom from Bernanke today,” said Michael Fitzpatrick, a vice president for energy at MF Global Ltd. in New York. “It’s doubtful that President Obama can say anything tonight that will calm the markets.”
U.S. Inventories
U.S. crude oil supplies fell 138,000 barrels in the week ended Feb. 13, the first decline so far this year. The drop left stockpiles 15 percent higher than the five-year average, the Energy Department said.
Analysts were split over whether gasoline supplies rose or fell, according to the median of 14 responses in the Bloomberg survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, dropped 1.35 million barrels, according to the survey.
The Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.
Brent crude oil for April settlement rose 13 cents, or 0.3 percent, to $41.12 a barrel on London’s ICE Futures Europe exchange.
