Crude Oil and Gasoline Futures Decline on Speculation U.S. Fuel Supplies Will Climb

Crude oil fell and gasoline declined for a fourth day on speculation that U.S. stockpiles of the fuel will surge as refineries bolster processing rates. U.S. plants operated at 84.5 percent of capacity last week, the highest level since October, according to an Energy Department report on April 7. Futures climbed earlier today on signals that Greece, Europe’s most indebted nation, will get an international bailout to avert a default.

“We’re still in corrective mode,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York. “Gasoline has been under pressure ever since the inventory report showed the increase in refinery runs.” Crude oil for May delivery declined 64 cents, or 0.8 percent, to $84.75 a barrel at 12:07 p.m. on the New York Mercantile Exchange. Prices climbed as much as 98 cents, or 1.1 percent, earlier today. Oil has dropped 0.1 percent this week and increased 6.8 percent this year.

Gasoline for May delivery slipped 1.78 cents, or 0.8 percent, to $2.2805 a gallon in New York. Oil surged to an 18 month intraday high of $87.09 on April 6 following reports that showed growth in U.S. jobs and service industries. “Prices moved higher on expectations that economic growth will continue and demand is going to increase,” said Chip Hodge, who oversees a $9 billion natural-resource bond portfolio as senior managing director at MFC Global Investment Management in Boston. “Inventory levels are still robust. If demand doesn’t pick up, oil is going to drop.”

U.S. Stockpiles

The U.S. Energy Department reported on April 7 that supplies of crude oil rose 1.98 million barrels to 356.2 million last week, leaving stockpiles 7.1 percent higher than the five year average for the period. It was the 10th consecutive gain, the longest stretch of weekly increases since late 2004.

“There’s no shortage of supply, and demand isn’t that strong,” said Paul M. Mecray III, a managing director at Tower Bridge Advisors, an investment adviser in West Conshohocken, Pennsylvania. “There are geopolitical concerns that are supporting prices. If Iran were to be attacked, oil would rise well over $100 in minutes.”

President Barack Obama vowed to maintain “consistent and steady” international pressure against Iran developing nuclear weapons capabilities. “I don’t think you’ve seen the degree of international unity that you’ve seen in this effort,” Obama said on ABC’s “Good Morning America” program, taped yesterday in Prague.

The U.S. is pushing for tougher measures in a fourth set of sanctions against Iran at the United Nations to stop what it says is an Iranian development program for a nuclear arms capability that would destabilize the Middle East. Brent crude oil for May settlement fell 38 cents, or 0.5 percent, to $84.43 a barrel on the London based ICE Futures Europe exchange.


Reporter Mark Shenk can be contacted at mshenk1@bloomberg.net


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Crude Oil Falls From 7 Week High as Dollar's Gain Reduces Appeal of Commodities

Crude oil fell as the dollar climbed the most against the euro in two weeks, reducing the appeal of commodities as an alternative investment. Oil slipped as much as 1.4 percent on the greenback’s advance after European Central Bank President Jean-Claude Trichet kept its benchmark interest rate unchanged and extended some stimulus measures to cement the economic recovery. Prices also dropped as a report showed that the number of contracts to buy previously owned homes in the U.S. declined in January.

“The dollar has been gaining strength, which is having an impact on the energy markets,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York. “We had some bad home sales data, which seems to also be sending prices lower.” Crude oil for April delivery fell 74 cents, or 0.9 percent, to $80.13 a barrel at 10:30 a.m. on the New York Mercantile Exchange. The contract rose 1.5 percent to $80.87 yesterday, the highest settlement level since Jan. 11.

Brent crude oil for April delivery declined 83 cents, or 1.1 percent, to $78.42 a barrel on the London-based ICE Futures Europe exchange. The dollar traded at $1.3595 per euro, up 0.8 percent from $1.3697 yesterday. The greenback is heading for the biggest gain since Feb. 17. An index of home purchase agreements, or pending home sales, fell 7.6 percent after a revised 0.8 percent increase in December, the National Association of Realtors announced today in Washington.....Read the entire article.


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Crude Oil Falls to a Five Week Low in New York as Gasoline Supplies Rise

Crude oil and gasoline fell to five week lows after a U.S. government report showed inventories of the motor fuel rose to a 22 month high. Oil dropped as much as 2.8 percent after the Energy Department said that gasoline supplies climbed 1.99 million barrels to 229.4 million last week, the highest level since March 2008. Oil stockpiles tumbled amid expectations that they would increase.

“The crude number was certainly supportive for prices, but the product numbers were negative,” said Tom Bentz, senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “We headed for some new lows and the selling dried up.” Crude oil for March delivery fell $1.45, or 1.9 percent, to $73.26 a barrel at 1:38 p.m. on the New York Mercantile Exchange. Oil touched $72.65, the lowest level since Dec. 21.

Oil supplies dropped 3.89 million barrels, or 1.2 percent, to 326.7 million, the department said. They were forecast to rise 1.5 million barrels in the Bloomberg survey, according to the median estimate of 19 analysts in a Bloomberg News survey. Gasoline stockpiles were estimated to increase 900,000 barrels.

“The only bullish number in today’s report was crude oil, and that was apparently due to the closure of the Houston Ship Channel,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. The Houston Ship Channel, which serves the largest U.S. petroleum port, reopened Jan. 21 after shutting two days earlier because of fog.....Read the entire article.


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Crude Oil Drops for a Fourth Day, Trades Below $75 as Dollar Strengthens

Crude oil dropped for a fourth day, trading below $75 a barrel as the dollar gained amid speculation the U.S. Federal Reserve will start raising interest rates. Oil closed at its lowest level since Oct. 14 last week after a better than forecast U.S. jobless report bolstered the dollar. Commodities including gold and oil typically weaken when the dollar appreciates. Traders have raised their expectations that the Fed will lift interest rates early next year.

“We’re seeing continued follow-through from the jobs data, fueling talk that the Federal Reserve may need to consider raising interest rates, strengthening the dollar,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. Crude oil for January delivery fell $1.02, or 1.4 percent, to $74.45 a barrel at 10:55 a.m. on the New York Mercantile Exchange, marking the first four day decline since August. Prices have climbed 67 percent this year.

The dollar increased to $1.4827 per euro from $1.4858 in New York at the end of last week. The dollar weakened this year as the Federal Reserve kept benchmark interest rates near zero since December 2008 to revive lending after the worst financial crisis since World War II.....Read the entire article.

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Oil Rises More Than $1 on Failure to Break Though Two Week Low

Crude oil rose more than $1 a barrel after failing to decline below a two week low and as the India’s central bank purchase of gold bolstered the appeal of commodities to investors. Selling stopped after futures fell to $76.55 a barrel earlier today, the lowest intraday price since Oct. 15. When prices do not drop after reaching a new low, technical traders see it as a sign to purchase oil. Prices also increased after the Reserve Bank of India bought 200 metric tons of gold from the International Monetary Fund.

“Oil tested support in the $76.50 area and failed to break through,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “From a technical standpoint, this was a sign that prices are moving higher.” Crude oil for December delivery climbed $1.16, or 1.5 percent, to $79.29 a barrel at 1:37 p.m. on the New York Mercantile Exchange. Prices have risen 78 percent this year. Oil fell as much as 2 percent earlier today on the announcement that the Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc received a second bailout from U.K. taxpayers, signaling that the global economy may take longer to recover from the worst recession since the 1930s.....Read the entire article.

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Crude Oil Fluctuates Amid Equity Gain, Ample U.S. Supplies

Crude oil fluctuated as equity gains indicated that the U.S. is pulling out of a recession amid ample fuel supplies in the world’s biggest energy using country. Oil is heading for a 4.6 percent increase this week, a second straight weekly advance, as the stock market climbed on data showing an expansion in U.S. housing starts and industrial capacity utilization.

The country’s supplies of crude oil, gasoline and distillate fuel are higher than average, according to the Energy Department. “This is a range bound market,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “There’s nothing at this moment that is giving it a direction”.....Read the entire article

Crude Oil Falls the Most in a Month as Global Equities Slump

Crude oil prices fell the most in a month as Chinese equities led a global slump on concern a slowdown in lending may derail an economic recovery in the world’s second largest energy consuming country. Oil futures declined for the first time in three days after the Shanghai Composite Index, China’s benchmark, tumbled 6.7 percent on a report that the nation’s banks cut lending. U.S., Asian and European stocks followed the Chinese market lower. “All of what we are seeing today can be blamed on the Chinese stock-market selloff,” said Tom Bentz, a senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “The Chinese markets have helped support commodities. Price rises have been based on expectations of increased economic growth and demand in China”.....Read Complete Article