Oil Extends Drop After U.S. Supplies Rise to 22-Year High
Crude oil futures extended losses after the U.S. Energy Department said stockpiles increased to a 22-year high.
Inventories of crude oil rose 2.21 million barrels to 384.7 million, a 10th consecutive weekly increase, the department said. Supplies were forecast to grow 1 million barrels.
Crude oil for July delivery fell $1.40, or 1.6 percent, to $86.42 a barrel at 11:06 a.m. on the New York Mercantile Exchange. Oil traded at $86.63 a barrel before release of the inventory report at 11 a.m.
The Energy Department published the supply report a day later than usual this week because of the Memorial Day holiday on May 28.
Oil also fell on speculation that slowing U.S. economic growth and Europe’s debt crisis will reduce fuel demand. More Americans applied for jobless benefits last week, ADP said companies added fewer positions than expected in May and the economy expanded less than estimated.
“The unemployment number, the ADP report and the GDP data all combine to create a negative picture for all the markets,” said John Kilduff, a partner at Again Capital LLC, a New York- based hedge fund that focuses on energy. “Watching Europe go off the rails again this month has been damaging to both confidence and demand.”
First-time claims for jobless benefits increased by 10,000 to 383,000 in the week ended May 26 from a revised 373,000 the prior week, the Labor Department said today.
Figures from Roseland, New Jersey-based ADP Employer Services showed payrolls increased by 133,000 this month following a revised 113,000 gain in April. The median estimate of 39 economists surveyed by Bloomberg called for a May advance of 150,000.
Gross domestic product climbed at a 1.9 percent annual rate from January through March, down from a 2.2 percent prior estimate, revised Commerce Department figures showed today in Washington.
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