BLBG:Oil Near Three-Month Low; Al-Naimi Says Prices Too High
Oil traded near the lowest level in three months in New York before a government report that may show inventories rose to the highest in more than 21 years in the U.S., the world’s biggest crude consumer.
Futures were little changed after slipping for a fourth day yesterday. U.S. supplies climbed 1.9 million barrels to 377.8 million last week, the most since September 1990, according to a Bloomberg News survey before the Energy Department report tomorrow. The seventh weekly increase would be the longest run since April 2010. Crude prices are “still a little bit high,” Saudi Arabia’s Oil Minister Ali al-Naimi said in Tokyo.
“We’ve seen a fairly significant inventory build-up,” Ric Spooner, a chief market analyst at CMC Markets in Sydney, said in a telephone interview today. “The recent trend of the market is obviously down and at this stage, from a technical point of view, looks to be remaining in a short-term downtrend.”
Crude for June delivery was at $97.75 a barrel, down 19 cents, in electronic trading on the New York Mercantile Exchange at 3:31 p.m. Sydney time. The contract slid 55 cents, or 0.6 percent, to $97.94 yesterday, the lowest close since Feb. 6. Prices are down 1.1 percent this year.
Brent oil for June settlement was at $113.55 a barrel, up 39 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate was at $15.80, from $15.22 yesterday.
Trend Channel
Oil in New York has dropped out of a downward-sloping trend channel on the daily chart going back about 10 weeks, signaling a breach of technical support, according to data compiled by Bloomberg. The lower boundary of the channel is about $98.29 a barrel today. Investors typically sell contracts when prices fall below chart-support levels.
Saudi Arabia, the world’s biggest crude exporter, is storing as much as 80 million barrels of crude and has 2.5 million barrels a day of spare capacity, al-Naimi said today before board meetings of Saudi Arabian Oil Co., of which he is chairman. The nation is pumping 10 million barrels a day of crude, he said April 13 in Seoul. That’s close to the fastest rate in at least 31 years, according to official data.
Oil in New York climbed as high as $110.55 this year amid speculation that Western sanctions aimed at halting Iran’s nuclear program will disrupt Middle East shipments.
India, Iran
India will curtail its imports of Iranian oil by 20 percent, officials said, as U.S. Secretary of State Hillary Clinton held talks in New Delhi to enlist India’s help with sanctions aimed at pressuring Iran over its nuclear program.
India, Asia’s third-biggest oil importer, will cut crude purchases from Iran to 14 million metric tons from 17.5 million in the 12 months ending March 31, according to two Indian diplomats and two refinery officials who asked not to be identified because they weren’t authorized to speak publicly. Iranian crude would account for 7 percent of India’s imports in fiscal 2013, down from 10 percent currently, the officials said.
India is “certainly working toward lowering their purchase of Iranian oil” and “we hope they will do even more,” Clinton told a gathering of students and civic leaders in the eastern Indian city of Kolkata yesterday, before flying to New Delhi for government meetings.
U.S. gasoline stockpiles probably rose 250,000 barrels last week, according to the median estimate of eight analysts in the Bloomberg survey. Distillate inventories, a category that includes heating oil and diesel, may have increased 750,000 barrels, the survey showed.
The Energy Department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington. The industry-funded American Petroleum Institute will report its own data today.
U.S. gasoline prices at the pump fell below year-earlier levels for a third week as refineries returned to service following seasonal maintenance. The national average price for regular gasoline dropped 1 percent to $3.79 a gallon as of yesterday from a week earlier, the Energy Information Administration said in a report.
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
