Crude Falls for Fourth Day After U.S. Inventories Data

Source:

"Crude inventories excluding those in the Strategic Petroleum Reserve gained 4.7 million barrels, more than analysts' expectations. . .in the week ended Feb. 6. . ."

Crude inventories excluding those in the Strategic Petroleum Reserve gained 4.7 million barrels, more than analysts' expectations, to 350.8 million barrels in the week ended Feb. 6, the Energy Information Administration (EIA) reported. Inventories at Cushing, Okla., the delivery point for futures traded on the New York Mercantile Exchange, rose to 34.9 million, the highest level on record.

Crude for March delivery ended down $1.61, or 4.3%, at $35.94 a barrel on the New York Mercantile Exchange, the lowest since Jan. 15. In a volatile session, the March contract rose more than 2% to $38.47 earlier.

"The inventories data are clearly bearish for crude," said James Williams, an economist at energy research firm WTRG Economics.

Crude has lost 13% in the four sessions since Feb. 5, on increasing worries over sluggish demand and inventories buildup.

The International Energy Agency (IEA) said in a report Wednesday that this year's global oil demand will fall by 1 million barrels a day, or 1.1%, from last year. If realized, it will be the biggest yearly drop since 1982.

Analysts surveyed by energy information provider Platts had expected a buildup of 3.4 million barrels in crude inventories, lower than the 4.7 million gain reported by the EIA. At 350.8 million barrels, last week's inventories level was the highest since July 2007.

Gasoline stockpiles fell by 2.6 million barrels while distillate fuels, which include diesel and heating oil, declined by 1 million barrels, the EIA reported.

Late Tuesday, the American Petroleum Institute pegged the week's drop in crude stockpiles at nearly 2 million barrels, putting total U.S. inventories at 344.25 million barrels for the week ended Feb. 6.

The IEA cited a worsening economic outlook as the reason for the weakness in oil demand. "While current OPEC supply curbs will eventually begin to clear the onshore stock overhang, significant volumes of 'floating' oil could dampen any upward price momentum in the short term," the IEA said.

OPEC is next scheduled to meet on March 15 in Vienna.

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