Oil fell from a three-day high in New York as investors sold contracts to profit from the biggest price surge since February, amid speculation U.S. crude stockpiles increased to near the highest in two years. Futures dropped as much as 2.4 percent before an Energy Department report tomorrow that may show inventories climbed for a third week. Prices also slipped after CME Group Inc. raised margins, or the amount of money traders must hold as collateral for their transactions, for futures trading in New York. Oil surged 5.5 percent yesterday after the biggest weekly decline since December 2008. “It’s just profit taking,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney, who predicted oil will average $100 a barrel this year. “It’s a technical bounce from that huge move we had the other day. Expect the volatility to continue. It’s across the board with the other commodities.” Crude for June delivery slid as much as $2.43 to $100.12 a barrel in electronic trading on the New York Mercantile Exchange. It was at $101.22 at 2:42 p.m. Singapore time. The contract rose 5.5 percent to $102.55 yesterday, the most since Feb. 22. Brent crude for June settlement on the London-based ICE Futures Europe exchange fell as much as $2.32, or 2 percent, to $113.58 a barrel. Yesterday, it jumped 6.2 percent to $115.90. Margin Increase CME Group, the Nymex owner, increased margins for crude speculators to $8,438 per contract from $6,750, effective after the close of business today. Heating-oil margins will rise to $8,438 from $6,413, and gasoline margins will climb to $9,450 from $7,763. Crude also dropped as the dollar gained, damping the investment appeal of commodities. The Dollar Index, a measure of the greenback against six major currencies, climbed as much as 0.4 percent to 75.005. The dollar and oil have moved in the opposite direction about 86 percent of the time over the past month, according to Bloomberg calculations of the two instrument’s correlation. U.S. crude stockpiles increased 1.5 million barrels from 366.5 million in the week ended May 6, according to the median of 11 estimates from analysts surveyed by Bloomberg News before tomorrow’s Energy Department report. Gasoline inventories are expected to have declined 750,000 barrels from 204.5 million. The industry-funded American Petroleum Institute will publish its own data today. China Imports China’s net crude imports rose 3 percent in April from a month earlier as refineries increased fuel production to supply to factories in the world’s fastest-growing major economy. Net imports advanced to 21.25 million metric tons last month, or 5.2 million barrels a day, according to Bloomberg calculations based on data posted today on the website of the Beijing-based General Administration of Customs. Net inbound shipments gained 1.3 percent from a year earlier. Brent, the European and African benchmark, traded at a premium of $13.59 a barrel to U.S. futures, the highest since April 18. The difference between front-month contracts in London and New York surged to a record $19.54 on Feb. 21. It averaged 76 cents last year. Brent has rallied 21 percent this year as unrest in the Middle East and North Africa toppled leaders in Tunisia and Egypt and disrupted exports from Libya. Security forces in Syria renewed their assault on pro-democracy protesters across the country, shooting at people who joined in demonstrations and seeking to arrest their organizers. To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net

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