Oil fell in New York before a U.S. government report today that may show that stockpiles of crude declined less than analysts forecast last week, raising skepticism about growth in the world’s biggest economy.
Futures declined as much as 1 percent after a separate industry report showed inventories fell 81,000 barrels. Analysts surveyed by Bloomberg News indicated the Energy Department will say supplies fell 1.83 million barrels. Federal Reserve Chairman Ben Bernanke will hold a press conference today following a meeting of the Federal Open Market Committee in Washington.
“Statements from Bernanke regarding the state of the U.S. economy after the FOMC meeting are likely to be a decisive factor for the crude oil market development today,” Filip Petersson, Stockholm-based commodity strategist at SEB AB said. “We expect a relatively bleak picture and no indications of further support efforts.”
Crude for August delivery on the New York Mercantile Exchange fell as much as 93 cents to $93.24 a barrel in electronic trading and was at $93.65 at 1:35 p.m. London time. The contract yesterday climbed 54 cents to $94.17. Futures have risen 21 percent in the past year.
Brent oil for August delivery was at $110.84 a barrel, down 11 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract traded at a premium of $17.19 a barrel to U.S. futures. The difference between front-month contracts in London and New York reached a record close of $22.29 on June 15.
Oil pared losses earlier after Greek Prime Minister George Papandreou won a confidence vote in Parliament early this morning, bolstering his government’s chances of pushing through reforms to secure more international financial aid.
The Greek vote “opens the way for the implementation of crucial austerity measures,” David Wech, Vienna-based head of research at JBC Energy GmbH said. “The worst-case scenario of a near-term default of the Southern European country seems to be off the table, at least for the time being.”
U.S. crude stockpiles slipped 81,000 barrels to 362.9 million last week, according to the industry-funded American Petroleum Institute yesterday. The Energy Department report today may show supplies fell 1.83 million barrels, according to the median forecast of 16 analysts surveyed by Bloomberg News.
Oil-supply totals from the API and the Energy Department have moved in the same direction 72 percent of the time over the past year. The API collects 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.
Oil prices are likely to remain “choppy” in the near-term as the market reacts to a slowdown in economic growth, before rising again in the second half of the year amid increasing demand, Goldman Sachs said in an e-mailed report dated June 21.
Crude in New York tumbled as much as 0.8 percent yesterday after David Fyfe, head of the IEA’s industry and markets division, said that the agency is seeing signs Saudi Arabian oil production is rising.
Fyfe’s comments follow a June 8 meeting of the Organization of Petroleum Exporting Countries at which members failed to reach a consensus on Saudi Arabia’s proposal to raise output to curb prices around $100 a barrel in New York. The kingdom is OPEC’s largest producer and has the bulk of its spare capacity.
To contact the editor responsible for this story: Stephen Voss on firstname.lastname@example.org