By Jacob Adelman - Aug 15, 2012 6:40 AM GMT+0400
Crude fell in New York after stockpiles in the U.S., the world’s biggest crude user, rose for the first time in three weeks, according to an industry report.
Futures dropped as much as 0.5 percent, retracing yesterday’s 0.8 percent gain, after theAmerican Petroleum Institute said oil inventories climbed by 2.78 million barrels to 367.1 million last week. The U.S. Energy Department may report today that stockpiles fell by 1.5 million barrels, according to a survey of 10 analysts by Bloomberg News.
“Increased inventory is something that’s taken very negatively,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney who predicts prices will trade lower than $98 a barrel for the next two to three months. “It becomes a bit of a barrier toward higher prices if there’s extra supply that can come on the market.”
Oil for September delivery fell as much as 43 cents to $93 a barrel and traded at $93.08 at 11:14 a.m. Tokyo time. The contract yesterday advanced 70 cents to settle at $93.43. Prices are down 5.7 percent since the beginning of the year.
Brent crude for September settlement, which expires Aug. 16, fell as much as 54 cents to $113.49 a barrel on the London-based ICE Futures Europe exchange. It rose 43 cents yesterday to $114.03. The more-active October contract was at $111.68 a barrel, down 47 cents. The European benchmark contract’s premium to New York futures was at $20.48, down from yesterday’s close of $20.60.
Falling Inventories
U.S. crude supply rose as imports increased for a second week, gaining 5.3 percent to 9.4 million barrels a day, the highest since the week of July 20, the API data showed.
Distillate fuel inventories increased 1.2 million barrels to 126.2 million, the report showed. Gasoline stockpiles fell by 2 million barrels to 205.7 million.
Today’s Energy Department report may show supplies of distillate fuel fell by 275,000 barrels last week, while gasoline stockpiles dropped 2 million barrels, according to the Bloomberg News survey of analysts.
API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Iran Talks
Tension with Iran over its nuclear program may still be solved with diplomacy, U.S. Defense Secretary Leon Panetta said yesterday. The Persian Gulf nation is the third largest oil producer in the Organization of Petroleum Exporting Countries.
The “window is still open” for diplomacy, Panetta said, following comments from Israeli officials that time has almost run out to avert military strikes. The U.S., concerned that a conflict could destabilize the Middle East and send oil prices higher, have been urging Israel to exercise caution.
Average U.S. gasoline pump prices were at a 12-week high as of Aug. 13 after climbing 11 percent in the previous six weeks, according to AAA, the nation’s largest motoring organization.
The biggest two-week gain in 17 months could turn fuel costs into a battleground once again for President Barack Obama and Republican Mitt Romney in the Nov. 4 election, according to Harry Tchilinguirian, head of commodity-markets strategy at BNP Paribas SA in London, and other analysts.
To contact the reporter on this story: Jacob Adelman in Tokyo at jadelman1@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
