Crude oil fell below $45 a barrel in New York on speculation the U.S. will report higher jobless figures, adding to signs of the deepening global recession. The number of people claiming unemployment benefits climbed to a record 5.155 million last week, a Labor Department report may show today. U.S. crude oil stockpiles were at 351 million barrels in the week ending Feb. 27, near the highest level since July 2007, the Energy Department said yesterday. Prices also fell as the dollar strengthened against the euro. “There is not much prospect for the upside in oil prices as long as we still see weak macroeconomic data,” said Eliane Tanner, commodity analyst at Credit Suisse Group in Zurich. “Demand in the U.S. has stabilized now but it is still weak.” Crude oil for April delivery fell as much as $1.41, or 3.1 percent, to $43.97 a barrel in electronic trading on the New York Mercantile Exchange. It was at $44.29 a barrel at 11:16 a.m. London time. Yesterday, futures rose $3.73 to $45.38. Prices are down 69 percent from the record $147.27 a barrel reached on July 11. Commodities yesterday had their biggest increase since Dec. 31. The Reuters/Jefferies CRB Index of 19 raw materials rose 7.78, or 3.8 percent, to 211.45. Crude oil supplies in the U.S. fell 757,000 barrels to 350.6 million barrels in the week ended Feb. 27, the Energy Department said in a report yesterday. Inventories were forecast to rise by 1 million barrels, according to the median of analyst estimates in a Bloomberg News survey. ‘Few Signs of Easing’ “Even though sizeable commodity rallies will occur from time to time, banking on continued upside momentum is not a sure thing, given the backdrop of a global recession that shows few signs of easing,” Edward Meir, an analyst with MF Global Ltd. in Connecticut, said in a report today. Brent crude oil for April settlement fell as much as $1.62, or 3.5 percent, to $44.50 a barrel on London’s ICE Futures Europe exchange. It was at $44.88 a barrel at 11:17 a.m. London time. Oil also fell as the dollar strengthened, reducing the appeal of commodities prices in the U.S. currency to investors. The dollar was at $1.2556 against the euro at 11:19 a.m. in London, compared with $1.2661 in New York yesterday. Stockpiles at Cushing, Oklahoma, where New York-traded West Texas Intermediate crude is delivered, declined 553,000 barrels to 34 million barrels last week, the report showed. Inventories in the week ended Feb. 6 were the highest since at least April 2004, when the department began keeping records for the location. Contango Narrowing The decline in inventories has narrowed the difference between WTI futures and London’s Brent crude. New York oil’s discount to Brent shrank to 50 cents a barrel today, the smallest since Dec. 15. The price of oil on Nymex for delivery in May is more than $1 a barrel higher than for April. The situation where prompt- month futures are less expensive than later-dated contracts is called contango. The difference narrowed from $2.83 on Feb. 23. For the Brent contract, the contango between the April and May contracts has narrowed further. It has moved from $1.37 a barrel on Feb. 23 to $1 a barrel today. U.S. refineries operated at 83.1 percent of capacity, up 1.8 percentage points from the prior week, the Energy Department report showed. Analysts were split over whether there was an increase or decline. Gasoline inventories rose 168,000 barrels to 215.5 million barrels, the report showed. Analysts forecast that supplies would decline 800,000 barrels. OPEC Output Falls The Organization of Petroleum Exporting Countries, due to meet again on March 15, cut output by 2.7 percent in February, a Bloomberg News survey showed. OPEC production averaged 27.78 million barrels a day last month, down 770,000 from January, according to the survey of oil companies, producers and analysts. Output in January was revised 20,000 barrels a day lower. “The market is in a tightening process with the OPEC production cuts, which will keep prices around these levels,” according to Tanner of Credit Suisse. The survey showed the 11 OPEC members with output quotas, all except Iraq, produced 545,000 barrels a day above the target of 24.85 million barrels a day. The countries pumping the most over their quotas were Iran, Angola and Libya. To contact the reporters on this story: Alexander Kwiatkowski in London at akwiatkowsk2@bloomberg.netChristian Schmollinger in Singapore at christian.s@bloomberg.net.

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