May 9 (Bloomberg) -- Oil fell a sixth day in New York, the longest losing streak in almost two years, as U.S. crude supplies rose and Greece struggled to form a government, adding to concern that Europe’s economy is weakening.
Futures dropped after the Energy Department said stockpiles climbed 3.65 million barrels to 379.5 million, the most since August 1990. Inventories were forecast to advance 2 million barrels, according to the median of 12 analyst estimates in a Bloomberg survey. Equities slipped and the euro weakened after weekend elections in Greece.
“Crude inventories have climbed by a cumulative 49.8 million barrels this year, which is impossible to ignore,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “The investors that have used this market as a financial instrument have to take note of the fundamentals. We won’t get rid of these excess inventories anytime soon.”
Crude oil for June delivery fell 20 cents to $96.81 a barrel on the New York Mercantile Exchange, the lowest settlement since Feb. 2. The price has slipped 8.8 percent in six days, which is the longest downward run since July 2010.
The contract dropped below the 200-day moving average in intraday trading before rebounding to close 52 cents above the target. The contract last settled below the technical level in December. Buy and sell orders tend to be clustered near chart-support levels.
“There’s a lot going on technically,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “A lot of technical support has been broken over the last week, the euro is breaking down and crude inventories are rising. This is all putting downward pressure on the market.”
Brent oil for June settlement rose 47 cents to $113.20 a barrel on the London-based ICE Futures Europe exchange.
Crude stockpiles at Cushing, Oklahoma, the delivery point for West Texas Intermediate oil, the grade traded in new York, rose 1.16 million barrels to a record 44.1 million.
Refineries operated at 86.4 percent of capacity, the highest level since the week ended Dec. 2, the report showed.
Lower fuel stockpiles pared the decline. Gasoline inventories fell 2.61 million barrels to 207.1 million, more than three times the 750,000-barrel decrease forecast. Inventories of distillate fuel, a category that includes heating oil and diesel, dropped 3.25 million barrels to 120.8 million.
“There’s been a remarkable gain in crude inventories,” Kilduff said. “At the same time, product stocks continue to decline, which will lend some support to the market.”
Gasoline for June delivery climbed 2.97 cents, or 1 percent, to $3.0241 a gallon in New York.
The election aftermath in Greece, which has 436 million euros ($566 million) of debt coming due on May 15, weakened the euro versus the dollar for an eighth day. The euro fell as much as 0.7 percent to a three-month low of $1.2912. A stronger U.S. currency reduces the appeal of raw materials as an investment.
“We have a big supply increase coupled with a strong dollar,” said Todd Horwitz, chief strategist at Adam Mesh Trading Group in Chicago. “It’s a double whammy.”
Alexis Tsipras of Greece’s anti-bailout Syriza party gave up a bid to build a coalition. Evangelos Venizelos, the socialist Pasok leader and former finance minister, said he’ll try to form a government when he receives a three-day mandate from President Karolos Papoulias tomorrow.
The Standard & Poor’s 500 Index declined for the fifth time in six days, dropping 0.5 percent.
“There’s a negative tone to equities and the euro because of changes in Europe, with Greece the chief concern at the moment,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
The sovereign debt crisis began in Greece and then moved to Ireland, Portugal, Italy and Spain. The cost of insuring against a Spanish default surged to a record on concern that a bailout of Bankia SA, the nation’s third-biggest lender, won’t fend off a banking crisis triggered by bad real estate loans.
There is increasing speculation Spain will become the fourth European country to seek a rescue as its lenders become overwhelmed by 184 billion euros ($239 billion) of what the nation’s central bank terms “problematic” assets linked to real estate.
“We’re facing price pressure on the supply side and the demand side,” said David McAlvany, chief executive officer of McAlvany Financial Group in Durango, Colorado. “There’s palpable fear in Europe, and it’s not limited to Greece.”
The Energy Department reduced its 2012 price projection for crude oil as supply is forecast to expand faster than fuel consumption. Oil in New York will average $104.12 a barrel this year, down 1.5 percent from the April forecast of $105.72, the department’s Energy Information Administration said yesterday in its monthly Short-Term Energy Outlook.
Electronic trading volume of crude oil on the Nymex was 580,269 contracts as of 3:22 p.m. in New York. Volume totaled 661,078 contracts yesterday, 7.8 percent above the three-month average. Open interest was 1.59 million.
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