Oil fell to the lowest level in seven weeks after a report showed rising U.S. stockpiles and the Federal Reserve Bank of Philadelphia President Charles Plosser said a new stimulus plan probably won’t boost economic growth.
Futures slid as much as 1.6 percent, temporarily falling below $90 a barrel for the first time since Aug. 3 on the New York Mercantile Exchange. The American Petroleum Institute said crude supplies increased 335,000 barrels, a third weekly gain, while Citigroup Inc. cut its global demand forecasts. Bond purchases announced by the Fed this month probably won’t spur expansion or hiring, Plosser said in a speech yesterday. Oil surged to $100.42 a barrel on Sept. 14, its highest this year, after the Federal Open Market Committee said it will undertake a third round of quantitative easing.
“The quantitative easing euphoria has eased,” Ole Hansen, senior manager of trading advisory at Saxo Bank A/S, said by phone from Copenhagen. “Renewed worries, especially in Spain, are putting the focus back onto global growth and the potential for subdued demand for oil.”
Crude for November delivery fell as much as $1.45 to $89.92 a barrel in electronic trading on the New York Mercantile Exchange and was at $89.96 at 1:16 p.m. London time. Futures slid 56 cents to $91.37 yesterday, the lowest close since Aug. 2. They are down 8.2 percent this year.
Brent oil for November settlement dropped $1.87, or 1.7 percent, to $108.58 a barrel on the London-based ICE Futures Europe exchange. The European benchmark grade’s premium to West Texas Intermediate in New York was at $18.62, compared with a close of $19.08.
U.S. crude stockpiles rose to 361.8 million barrels last week, the highest since the week ended Aug. 24, the API said. An Energy Department report today may show inventories climbed 1.9 million barrels, according to the median estimate of 11 analysts in a Bloomberg News survey.
Gasoline supplies gained 112,000 barrels last week, the API said. They are projected to increase 500,000 barrels, according to the survey. Distillate inventories, a category that includes heating oil and diesel, fell 483,000 barrels compared with a forecast gain of 500,000.
The industry-funded API collects stockpile 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.
Libya is training former rebels to protect oil installations across the North African nation, the head of the country’s state oil company said.
The ministry of defense is training 10,339 citizens and militiamen who took part in the revolt that ousted the regime of Muammar Qaddafi last year, National Oil Corp. Chairman Nuri Berruien said yesterday in a telephone interview in the capital, Tripoli. They will join an existing force of 2,500 security workers by the end of the year, he said.
Citigroup cut its oil-demand outlook on a slowdown in nations outside the Organization for Economic Cooperation and Development. Consumption will climb to 89.7 million barrels a day this year from 89.1 million in 2011, less than a July projection of 90.1 million, Edward L. Morse, the bank’s global head of commodities research in New York, said in an e-mailed report yesterday. Demand in 2013 will rise to 90.7 million barrels a day, compared with a previous estimate of 91 million.