BLBG:Oil Declines For First Day In Three As U.S. Stockpiles Increase
Oil dropped for the first time in three days in New York on concern that rising stockpiles signal faltering demand in the U.S., the world’s biggest crude consumer.
Futures slid as much as 0.7 percent, erasing yesterday’s 0.5 percent gain. Crude inventories climbed by 2.7 million barrels last week, the first increase in five weeks, data from the Energy Department showed. Supplies were forecast to decline 1 million barrels, according to a Bloomberg News survey. Sales of new U.S. homes unexpectedly decreased in June from a two-year high, a Commerce Department report showed.
“The inventory data was bearish for crude and may weigh on the market on the short-term,” said Michael Poulsen, an analyst at Global Risk Management in Middelfart, Denmark. ‘Ultimately, the never-ending global debt story and unrest in the Middle East will drive prices for the foreseeable future.’’
Crude for September delivery fell as much as 62 cents to $88.35 a barrel in electronic trading on the New York Mercantile Exchange and was at $88.67 at 9:03 a.m. London time. The contract yesterday rose 47 cents to $88.97, the highest close since July 20. Prices are 10 percent lower this year.
Brent oil for September settlement on the London-based ICE Futures Europe exchange slid as much as 75 cents, or 0.7 percent, to $103.63 a barrel. The European benchmark crude was at a $15.42 premium to New York contracts. The spread closed at $15.41 yesterday, the widest in seven weeks.
Ichimoku Cloud
Oil in New York has technical support around $86 a barrel, along the lower of two so-called leading span lines that define an “ichimoku cloud” on the daily chart, according to data compiled by Bloomberg. That’s an area where buy orders tend to be clustered. Crude started a descent in early May to an almost nine-month low after falling out of an ichimoku cloud.
Gasoline stockpiles rose 4.1 million barrels in the week ended July 20 to 210 million, the highest in three months, the Energy Department report showed yesterday. Supplies were forecast to drop 1 million barrels, according to the median estimate of 11 analysts surveyed by Bloomberg. The increase followed a 50 percent jump in product imports from a week ago to 2.6 million barrels a day.
The U.S. East Coast imported 964,000 barrels a day of gasoline last week, the most since January, according to the data. Stockpiles were up 1.8 million barrels last week. The area, known as Padd 1, consumes the most motor fuel in the country.
Distillate inventories, a category that includes heating oil and diesel, climbed 1.7 million barrels to 125 million, according to the Energy Department. They were forecast to gain 1.4 million barrels, the survey showed.
U.S. Homes
U.S. home purchases fell 8.4 percent to a 350,000 annual rate, the weakest since January, the Commerce Department reported yesterday. The median estimate in a Bloomberg News survey of 74 economists was 372,000. The decline was led by a record plunge in the Northeast, where the number of properties available last month was the fewest for any June.
“Our industry continues to see significant price volatility as a result of economic and political developments,” Peter Voser, chief executive officer of Royal Dutch Shell Plc (RDSA), said today in the company’s second-quarter earnings statement.
Brent may trade in a range from from $100 to $115 a barrel in the week ahead, supported by “much improved” Chinese economic data, Gordon Kwan, head of energy research at Mirae Asset Securities Ltd. in Hong Kong, said in an e-mailed report today. Manufacturing in China, the world’s second-largest oil user, may contract at a slower pace in July, according a survey by HSBC Holdings Plc and Markit Economics on July 24.
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
