BLBG: Crude Oil Falls a Second Day as Report Shows Stockpile Gain
By Mark Shenk
July 29 (Bloomberg) -- Crude oil fell for a second day after an industry report showed stockpiles rose in the U.S., the world’s biggest energy-consuming country.
Supplies climbed 4.07 million barrels last week, the most since April, according to figures released by the American Petroleum Institute late yesterday. The Energy Department is scheduled to release its weekly inventory report today. Oil extended declines after orders for U.S. durable goods fell more than forecast in June.
“If we get confirmation that inventories did increase in the report today, any worry about supplies of crude oil would go away,” said John Kilduff, senior vice president of energy at MF Global in New York. “After two weeks of moving straight up it was about time that the market had a correction.”
Crude oil for September delivery fell $1.55, or 2.3 percent, to $65.68 a barrel at 9:01 a.m. on the New York Mercantile Exchange. Prices are poised for the biggest one-day decline since July 8. Futures are up 47 percent this year and have dropped 55 percent from a record $147.27 reached on July 11, 2008.
Excluding transportation equipment, demand for goods meant to last several years climbed 1.1 percent, the most in four months, the Commerce Department said today in Washington. Total orders fell 2.5 percent, the first decrease in three months.
Stockpile Gain
U.S. crude oil inventories climbed to 352.4 million in the week ended July 24, according to the institute. The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires reports to be filed with the Energy Department for its weekly survey.
Today’s supply report will probably show crude oil inventories dropped 1.5 million barrels last week, according to the median of 13 estimates in a Bloomberg News survey.
Mark Mobius, executive chairman of Templeton Asset Management Ltd., said he wouldn’t “be surprised if oil falls to $20-$30 a barrel,” even though commodities are on a long-term upward trend. Mobius uses crude oil at $70 a barrel for long- term planning purposes, he told reporters today in the southern Russian city of Volgograd.
Brent crude oil for September settlement on London’s ICE Futures Europe exchange declined $1.02, or 1.5 percent, to $68.86 a barrel.
To contact the reporters on this story: Mark Shenk in New York at mshenk1@bloomberg.net
