BLBG: Oil Falls as API Reports Gains in U.S. Inventories
Oil fell for a fifth day, heading for the longest losing streak in five months, after the American Petroleum Institute said inventories rose for a seventh week.
Crude declined as much as 0.7 percent after the industry- funded API said yesterday stockpiles rose 313,000 barrels in the seven days ended Oct. 19 to 369.6 million. The Energy Department may report a gain of 1.8 million in its own data, according to analysts surveyed by Bloomberg. Prices also dropped on concern the European debt crisis is worsening.
“People are thinking we are going to have another inventory build,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “If that proves to be the case we’ll see some selling pressure. We really haven’t seen anything concrete improvement in Europe.”
Crude for December delivery slid 54 cents, or 0.6 percent, to $86.15 a barrel at 9:47 a.m. on the New York Mercantile Exchange. The five-day loss would be the longest since May 18. The futures are down 13 percent this year.
Brent for December settlement fell 18 cents to $108.07 on the London-based ICE Futures Europe exchange.
The Energy Department may say that U.S. inventories increased to 371 million in the seven days ended Oct. 19, according to the median of 11 analyst estimates. A gain of that size would leave stockpiles at the highest level since July.
“The market is pricing in the possibility of another build in inventories,” said Phil Flynn, senior market analyst at the Price Futures Group in Chicago.
Europe Output
Euro-area services and manufacturing output contracted more than economists forecast in October and German business confidence dropped to the lowest in more than 2 1/2 years.
A composite index based on a survey of euro-area purchasing managers in services and manufacturing fell to 45.8, the lowest in more than three years, from 46.1 in September, London-based Markit Economics said today. Economists had forecast a reading of 46.5, according to a Bloomberg News survey.
In Germany, the Ifo institute in Munich said its business climate index, based on a survey of 7,000 executives, dropped to 100.0 from 101.4 in September. That’s the sixth straight decline and the lowest reading since February 2010.
Federal Reserve Chairman Ben S. Bernanke and his colleagues on the Federal Open Market Committee will conclude a two-day meeting today and release a statement on policy, including their current plan to buy $40 billion in mortgage-backed securities each month for an indefinite period.
“There is a sense that the Fed isn’t going to be able to do a lot more to help the economy,” Flynn said. “Europe is not out of the woods yet.”
Oil gained earlier as a Chinese manufacturing index gained. The preliminary, or flash, reading was 49.1 for a purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics, after a final level of 47.9 for September. China is the world’s second-largest oil consumer after the U.S.
To contact the reporter on this story: Moming Zhou in New York at mzhou29@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
