Inventories of crude oil rose 6.68 million barrels to 325.4 million barrels last week, the highest since May, the Energy Department said today in a weekly report. Supplies were forecast to increase by 800,000 barrels, according to the median of forecasts by 14 analysts in a Bloomberg News survey.
"We're pushing up toward capacity limits," said Lawrence Eagles, global head of commodities research at JPMorgan Chase & Co. in New York. "There's still a bit of space, but not much."
The price of oil for delivery in February 2010 is 41% more than for the current month, increasing the opportunity for traders to profit. This structure, in which the subsequent month's price is higher than the one before it, is known as contango. Contango trading encourages companies to increase stockpiles if they have available storage.
U.S. fuel consumption during the four weeks ended Jan. 2 averaged 20.1 million barrels a day, down 2.9% from a year earlier, while refineries operated at 84.6% of capacity last week, up 2.1 percentage points from the week before, the Energy Department report showed. Analysts forecast that there would be no change in utilization.