Oil declined for a second day after a government report yesterday showed a bigger than forecast inventory gain in the U.S., the world’s largest energy consumer. Oil dropped as the Energy Department said crude supplies rose 1.98 million barrels to 356.2 million last week. Stockpiles were expected to climb by 1.35 million barrels, according to a Bloomberg News analyst survey. Machinery orders in Japan, the world’s third largest oil user, unexpectedly fell in February.
“The report was bearish really any way you look at it,” said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “So there was a bit of heat coming out of the market but it’s OK since were trading on expectations on the economy. And the economy is going to be going in fits and starts.” Crude oil for May delivery fell as much as 39 cents, or 0.5 percent, to $85.49 a barrel and was at $85.74 in electronic trading on the New York Mercantile Exchange at 11:55 a.m. Singapore time. Yesterday, the contract declined 96 cents, or 1.1 percent, to settle at $85.88, dropping from an 18-month intraday high of $87.09 made April 6.
Orders for factory equipment and items such as power generators, an indicator of business investment in three to six months, declined 5.4 percent from January, the Cabinet Office said today in Tokyo. The median estimate of 31 economists surveyed by Bloomberg was for a 3.7 percent gain. “Oil was getting a little bit frothy and probably out of line with where the fundamentals are at the moment,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “We had a rise in crude stocks, which is not an isolated incident. It does seem that the supply overhang in the U.S. isn’t being properly addressed”.....Read the entire article.
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