Oil Snaps Five-Day Decline After Report Shows Drop in Supplies
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By Ben Sharples
Dec. 9 (Bloomberg) -- Crude oil climbed above $73 a barrel in New York after an industry report showed U.S. supplies dropped, bolstering optimism that fuel demand in the biggest energy-consuming nation will increase.
Oil rose for the first time in six days after the American Petroleum Institute said crude inventories fell by 5.82 million barrels. Futures fell to an eight-week low yesterday as the dollar gained against the euro. The U.S. Energy Department will release its weekly report today in Washington. Inventories are forecast to rise, according to a Bloomberg News survey.
“If we see a number of that magnitude in the Department of Energy numbers, that might provide some support to prices,” Toby Hassall, research analyst with CWA Global Markets Pty in Sydney, said by telephone today.
Crude oil for January delivery gained as much as 57 cents, or 0.8 percent, to $73.19 a barrel in electronic trading on the New York Mercantile Exchange. It was at $73.15 at 11:16 a.m. in Sydney. Yesterday, the contract fell $1.31 to $72.62 a barrel, the lowest settlement since Oct. 9. Futures are up 64 percent this year.
The Energy Department report is forecast to show that crude inventories increased 250,000 barrels, according to the survey. Oil-supply totals from the API and Energy Department moved in the same direction 75 percent of the time in the past four years, according to data compiled by Bloomberg.
Dollar Strength
The euro fell to a one-month low against the dollar on speculation credit ratings of more European nations will be cut after Greece’s debt ranking was lowered by Fitch Ratings. The dollar traded at $1.4688 per euro at 11:07 a.m. in Sydney, the strongest level since Nov. 3, from $1.4704 yesterday.
“The dollar has been a very supportive element for oil in recent months,” Hassall said. “If you pull that support away, it exposes a bit of downside.”
Gasoline supplies fell 753,000 barrels last week, according to the API report. Inventories of distillate fuel, a category that includes heating oil and diesel, rose 1.01 million barrels from 168.9 million, the report showed.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Brent crude oil for January settlement on the London-based ICE Futures Europe exchange fell $1.24, or 1.6 percent, to $75.19 a barrel yesterday.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
Last Updated: December 8, 2009 19:42 EST
