Oil drops on signs U.S. demand easing as supplies gain
Azerbaijan, Baku, April 5 / Trend /
Oil dropped from the highest since September 2008 in New York on speculation U.S. inventories rose to the highest in four months as prices depress fuel demand in the world's biggest crude consumer, Bloomberg reported.
Futures slid as much as 0.4 percent, the first decline in four days, before a report tomorrow that may show crude supplies increased 1 million barrels last week, according to a Bloomberg News survey. Distillate stockpiles probably rose 500,000 barrels. Prices also fell after the New York Times reported sons of Libyan leader Muammar Qaddafi are seeking his ouster, stoking speculation the fighting that has crippled the country's oil exports may ease.
"If there was some event that signaled an orderly resolution in the Middle East, then that premium is expected to be unwound," said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. "There is still inflated distillate supply and we judge it being around 30 percent above long-run average levels."
Crude for May delivery fell as much as 45 cents, or 0.4 percent, to $108.02 a barrel in electronic trading on the New York Mercantile Exchange, and was at $108.09 at 1:02 p.m. Singapore time. Yesterday, the contract advanced 53 cents to $108.47, the highest settlement since Sept. 22, 2008. Prices are up 25 percent from a year ago.
Brent oil for May settlement traded at $120.79 a barrel, down 27 cents, on the London-based ICE Futures Europe exchange. Yesterday, the contract climbed $2.36, or 2 percent, to settle at $121.06.
Crude stockpiles in the U.S. increased 0.3 percent in the seven days ended April 1 from 355.7 million a week earlier, according to the median of nine analyst estimates before the report tomorrow. Eight of the respondents forecast a gain and one a decline. The industry-funded American Petroleum Institute will publish its own data today.
Inventories of distillate fuel, a category that includes heating oil and diesel, probably increased 500,000 barrels from 153.3 million, the survey showed.