Oil declined for the first time in four days as the dollar rose against the euro and a government report showed a bigger than forecast increase in crude oil supplies in the U.S., the world’s biggest energy consumer. Oil pared yesterday’s 2.2 percent gain after crude stockpiles rose 3.09 million barrels to 334.5 million last week, according to a report from the Department of Energy. An increase of 1.73 million barrels was forecast, according to the median estimates in a Bloomberg News survey. A stronger dollar damps investor demand for commodities.
Crude oil for March delivery dropped as much as 91 cents, or 1.2 percent, to $78.15 a barrel in electronic trading on the New York Mercantile Exchange. It was at $78.20 at 10:32 a.m. in Sydney. Yesterday, the contract rose $1.73 to $79.06, the highest settlement price since Jan. 14. Futures have gained 5.5 percent this week. The dollar rose after the Federal Reserve raised the discount rate charged to banks for direct loans for the first time in more than three years. The U.S. currency traded at $1.3493 per euro at 10:36 a.m. in Sydney, from $1.3527 yesterday.
Inventories of distillate fuel, a category that includes heating oil and diesel, fell 2.94 million barrels to 153.3 million, according to the department. Gasoline stockpiles climbed 1.62 million barrels to 232.1 million. An increase of 1.5 million barrels was forecast. Brent crude for April delivery rose $1.51, or 2 percent, to end the session at $77.78 a barrel on the London based ICE Futures Europe exchange yesterday.
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