Crude Falls in Asia, Approaches $50 Mark
Wednesday May 11, 11:50 pm ET
By En-Lai Yeoh, Associated Press Writer
Crude Falls in Asia, Approaches $50 Mark on Sluggish Demand, Rising Supplies
SINGAPORE (AP) -- Crude oil prices slipped in Asia Thursday, approaching the $50 a barrel threshold as bearish reports from the U.S. Department of Energy and the International Energy Agency weighed in heavily on energy markets.
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After closing down $1.62 at $50.45 a barrel on the New York Mercantile Exchange overnight, benchmark crude fell a further 38 cents in after-hours, electronic trading to $50.07 midmorning in Asia.
Heating oil and unleaded gas also fell in Asia, to $1.400 a gallon (3.8 liters) and $1.4700 a gallon respectively.
The U.S. Energy Department said Wednesday that domestic crude inventories grew by 2.7 million barrels last week to 329.7 million barrels, or 10 percent above year ago levels, while the Paris-based International Energy Agency forecast that oil output would meet demand in the second half of the year.
"A couple of body punches in the form of steady U.S. gasoline stocks ... and ample-looking IEA supply may be felt in later rounds," said Energyintel's David Knapp.
Gasoline inventories grew last week by 200,000 barrels to 213.7 million barrels, or 5 percent above year ago levels, as refinery activity increased slightly, the agency said. The nation's supply of distillate fuel, which includes heating oil and diesel, rose by 1.7 million barrels to 104 million barrels, or 2 percent above year ago levels.
Data on U.S. petroleum inventories often move markets because they give traders a sense of demand -- and usage -- in the world's largest consumer of crude.
The IEA forecast that production would meet peak demand in the Northern Hemisphere winter but warned of thin spare production capacity and a possible tightening of oil stocks in the United States.
The report also said robust Chinese oil demand -- which helped prices spike last year -- grew only 4.5 percent in the first quarter of this year, compared with a 19.3 percent on-year jump in the first three months of 2004.
Oil prices have fallen from their peak of more than $58 a barrel in early April amid increases in U.S. oil stockpiles over the past three months.
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