Crude oil fell after a government report showed a bigger than forecast increase in U.S. supplies and as the dollar surged to a 10 month high against the euro. Stockpiles rose 7.25 million barrels to 351.3 million last week, the Energy Department said. Inventories were forecast to climb 1.65 million barrels, according to a Bloomberg News survey. The greenback increased after Fitch Ratings cut Portugal’s credit grade. A stronger dollar reduces the appeal of commodities as an alternative investment.
“The crude number was a lot bigger than what was expected,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York. “There hasn’t been much attention paid to the fundamentals lately. The market has been more focused on what happens to the dollar and equities.” Crude oil for May delivery dropped $1.04, or 1.3 percent, to $80.87 a barrel at 11:01 a.m. on the New York Mercantile Exchange. Futures have increased 1.9 percent in 2010 and 50 percent from a year earlier.
Imports of crude oil gained 12 percent to 9.4 million barrels a day last week, the highest level since September and the biggest change since August, the report showed. Gasoline stockpiles fell 2.72 million barrels to 224.6 million in the week ended March 19. A 1.5-million-barrel drop was forecast, according to the median of 16 analyst responses in the Bloomberg News survey. Inventories of distillate fuel, a category that includes heating oil and diesel, declined 2.42 million barrels to 145.7 million, according to the department. A decrease of 985,000 barrels was forecast.....Read the entire article.
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