Oil fell in New York on forecasts that crude stockpiles rose to the highest level in six months in the U.S., the world’s largest consumer of the commodity.
Futures declined as much as 0.6 percent before an Energy Department report today that will show crude supplies climbed last week, according to a Bloomberg News survey. Stockpiles grew by 2.8 million barrels, according to data yesterday from the American Petroleum Institute. The International Energy Agency cut forecasts for oil supplies from outside OPEC this year because of lower exports from Sudan and Syria, and said reduced spare output capacity raises the risk of a price surge.
Crude for April delivery fell as much as 59 cents to $106.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $106.42 at 12:06 p.m. London time. It increased 37 cents yesterday to $106.71 a barrel, the highest settlement since March 9. Prices have gained 7.7 percent this year.
Brent oil for April settlement on the London-based ICE Futures Europe exchange slid 0.2 percent to $126.03. The contract expires tomorrow. The more-actively traded May future was down 11 cents at $125.56. The European benchmark crude was at a premium of $19.60 to New York futures. The gap yesterday was $19.51, the widest based on closing prices since Oct. 24.
Producers not in the Organization of Petroleum Exporting Countries will provide 53.5 million barrels a day this year, or 200,000 a day less than the IEA forecast last month.
U.S. crude inventories probably increased 1.6 million in the week ended March 9 to 347.3 million, the most since Sept. 2, according to the median estimate of nine analysts surveyed by Bloomberg News. Yesterday, the industry-funded American Petroleum Institute said supplies climbed 2.8 million barrels to 349.3 million.
Gasoline stockpiles fell 1 million barrels, after dropping the previous three weeks, the survey showed. The API said inventories of the motor fuel declined by 2.1 million barrels to 226.3 million, the lowest in six weeks.
The Energy Department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. in Washington. The International Energy Agency is set to release its monthly oil market report today at 9 a.m. London time.
Oil in New York has technical support around $106 a barrel today, according to data compiled by Bloomberg. On the daily chart, that’s the bottom of a symmetrical triangle going back more than two weeks. The top of the triangle, representing chart resistance, is about $107.67 today. Investors tend to buy contracts when prices break upward from a triangle pattern or sell when support is breached.
To contact the editor responsible for this story: Stephen Voss at email@example.com