Crude Futures Seen Falling Next Week as Refineries Do Seasonal Maintenance

Crude oil may fall next week as U.S. refineries perform seasonal maintenance, reducing demand, a Bloomberg News survey showed.

Fourteen of 34 analysts, or 41 percent, forecast crude oil will decline through Sept. 10. Ten respondents, or 29 percent, predicted that futures will rise, and 10 projected prices will be little changed. Last week, 41 percent of analysts forecast an increase.

U.S. refineries operated at 87 percent of capacity in the week ended Aug. 27, down 0.7 percentage point from the prior week, an Energy Department report showed on Sept. 1. It was the lowest level since April. Refiners often idle units for maintenance in September and October as gasoline demand falls and before heating-oil use increases.

“There’s uncertainty about the demand side of the market,” said Tim Evans, an analyst at Citi Futures Perspective in New York. “Refineries are cutting back on operating rates, which is going to reduce demand for crude oil. Also, U.S. domestic production has been quietly rising, it’s now at the highest level since 2004.”

U.S. crude oil production increased 1.7 percent to 5.6 million barrels a day last week, the highest level since May 2004, the department said.

Crude oil for October delivery has declined 57 cents, or 0.8 percent, to $74.60 a barrel this week on the New York Mercantile Exchange. Prices are up 9.8 percent from a year ago.

The oil survey has correctly predicted the direction of futures 47 percent of the time since its start in April 2004.

     Bloomberg’s survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:

     RISE      NEUTRAL    FALL
     10         10        14

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net

• Tweet
• More
  • Business Exchange
  • Buzz up!
  • Digg
• Print
• Email