Bloomberg: Oil Drops for Second Day After Gain in U.S. Crude Stockpiles
Jan. 15 (Bloomberg) -- Crude oil fell for a second day in New York after a government report yesterday showed slowing demand sent U.S. stockpiles soaring to a 16-month high.
Inventories of crude increased 1.14 million barrels to 326.6 million last week, the highest since Aug. 31, 2007, the U.S. Energy Department said. Gasoline and distillate fuel supplies also rose. Fuel demand fell 6 percent, the largest one- week decline in almost five years, as the Federal Reserve reported the U.S. economy weakened further in the past month.
“The data continues to show that the overall demand for oil is very weak,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “The inventory build shouldn’t be surprising given the weakness in consumption.”
Crude oil for February delivery fell as much as $1.06, or 2.8 percent, to $36.22 a barrel in electronic trading on the New York Mercantile Exchange. It was at $36.25 a barrel at 12:38 p.m. Singapore time. Yesterday, futures 1.3 percent to $37.28 a barrel in New York, the lowest settlement since Dec. 24. Futures are down 61 percent from a year ago.
U.S. inventories of crude oil were forecast to rise 2.5 million barrels in the week ended Jan. 9, according to the median of 15 analyst estimates in a Bloomberg News survey. The increase last week left stockpiles 10 percent higher than the five-year average for the period, the department said.
“The stock levels around the world are at 84 days of consumption, which is a record high,” said Jan de Laat, global head of energy, trade and commodity finance at Rabobank International in an interview with Bloomberg Television. “In the short term that isn’t going to change, the demand isn’t there and the economy is still from the financial crisis.”