West Texas Intermediate fell for a
second day as crude stockpiles remained near record-high levels
amid declining fuel demand in the U.S., the world’s biggest oil
consumer. Brent decreased in London.
Futures dropped as much as 0.4 percent in New York. Crude
supplies shrank by 3.43 million barrels to 389.5 million last
week, the Energy Information Administration reported yesterday.
They were at 399.4 million through April 25, the most since the
Energy Department’s statistical arm started publishing weekly
data in 1982. Distillate inventories expanded, while a measure
of gasoline demand slid from the highest level in almost three
years following the Memorial Day holiday weekend.
“There’s still concern that the market is oversupplied,”
said Jonathan Barratt, the chief investment officer at Ayers
Alliance Securities in Sydney who predicts investors may buy WTI
contracts if prices fall to about $102 a barrel. “If oil can’t
move higher on draws at the beginning of the drive-time season,
then what will it move higher on?”
WTI for July delivery declined as much as 45 cents to
$102.19 a barrel in electronic trading on the New York
Mercantile Exchange and was at $102.34 at 12:33 p.m. Singapore
time. The contract lost 2 cents to $102.64 yesterday. The volume
of all futures traded was about 20 percent below the 100-day
average. Prices are up 4 percent this year.
Brent for July settlement decreased as much as 40 cents, or
0.4 percent, to $108 a barrel on the London-based ICE Futures
Europe exchange. The European benchmark crude traded at a
premium of $5.98 to WTI. The spread closed at $5.76 yesterday,
the narrowest since April 15.
Fuel Demand
WTI dropped last week after the EIA reported that crude
inventories rose the most since April. Gasoline stockpiles
increased by 210,000 barrels to 211.8 million in the seven days
ended May 30, the data show. The peak U.S. driving season
typically starts from Memorial Day, which was on May 26, to
Labor Day on Sept. 1.
Gasoline supplied to wholesalers, a proxy for demand, slid
2.2 percent to 9.1 million barrels a day last week, the EIA
said. Prices at the pump may decline through the end of June as
demand slows, according to a forecast by AAA, the largest U.S.
motoring group. Total fuel consumption was down 977,000 barrels
a day, the most since December.
Distillate inventories, including heating oil and diesel,
climbed by 2.01 million barrels to 118.1 million. They were
forecast to gain 900,000 barrels, according to the median
estimate in a Bloomberg News survey of 10 analysts.
WTI has technical support along its 50-day moving average,
at about $102 a barrel today, data compiled by Bloomberg show.
Buy orders tend to be clustered around chart-support levels.
The Organization of Petroleum Exporting Countries will
probably maintain its production quota at 30 million barrels a
day at a June 11 meeting in Vienna, according to a separate
Bloomberg survey of analysts and traders. The 12-member group
pumps about 40 percent of the world’s crude.
To contact the reporter on this story:
Ben Sharples in Melbourne at
bsharples@bloomberg.net
To contact the editors responsible for this story:
Pratish Narayanan at
pnarayanan9@bloomberg.net
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