Crude oil fell after an industry report showing an increase in U.S. supplies reinforced speculation that fuel demand will be slow to recover.
The American Petroleum Institute reported that crude inventories rose by 2.89 million barrels last week, while gasoline and distillate fuel stockpiles also climbed. The U.S. Energy Department will release its report today. Ministers from Iran, Nigeria and Kuwait have indicated the Organization of Petroleum Exporting Countries will keep supply quotas unchanged at their Dec. 22 meeting.
“Eighty-dollars is proving a tough nut to crack, and last night’s stats put paid to any further testing of the resistance there,” said Christopher Bellew, senior broker at Bache Commodities Ltd. “There doesn’t seem any shadow of doubt that OPEC will leave quotas unchanged, and that’ll keep prices range- bound until the meeting.”
Crude oil for January delivery declined as much as 82 cents, or 1.1 percent, to $77.55 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $78.06 at 1:08 p.m. London time. Prices have gained 74 percent this year.
Crude gained yesterday after reports yesterday showed signs of increased manufacturing output in the U.S. and China, which account for about 32 percent of global oil consumption.
The U.S. Energy Department will release its weekly supply report today in Washington. Inventories are forecast to decline, according to a Bloomberg News survey.
Energy Department
The Energy Department report is forecast to show that crude inventories fell 450,000 barrels, according to the survey. Oil- supply totals from the API and Energy Department moved in the same direction 75 percent of the time in the past four years, according to data compiled by Bloomberg.
“What is important here is that demand recovery was not as swift as expected, and this is also evident from overhanging crude and product stocks,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “We do not expect demand from the U.S. to reach pre-crisis levels until well into 2011.”
Inventories of distillate fuels, which include heating oil and diesel, rose 1.06 million barrels to 168 million, the API report showed. The Energy Department will probably say stockpiles fell 350,000 barrels last week, according to the Bloomberg News survey. Supplies are at 166.9 million barrels, the highest since January 1983.
The 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.
Yachtsmen Released
Five British yachtsmen detained by Iran’s navy in the Persian Gulf last week were released today, state-run media reported. Oil prices dropped about 50 cents a barrel after the news of the release.
Iran’s Revolutionary Guards Corps said questioning of the sailors made it clear they had entered Iranian waters by mistake, the Fars news agency reported.
Brent crude oil for January settlement was at $79.13 a barrel, down 22 cents, on the London-based ICE Futures Europe exchange at 1:10 p.m. London time.
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The American Petroleum Institute reported that crude inventories rose by 2.89 million barrels last week, while gasoline and distillate fuel stockpiles also climbed. The U.S. Energy Department will release its report today. Ministers from Iran, Nigeria and Kuwait have indicated the Organization of Petroleum Exporting Countries will keep supply quotas unchanged at their Dec. 22 meeting.
“Eighty-dollars is proving a tough nut to crack, and last night’s stats put paid to any further testing of the resistance there,” said Christopher Bellew, senior broker at Bache Commodities Ltd. “There doesn’t seem any shadow of doubt that OPEC will leave quotas unchanged, and that’ll keep prices range- bound until the meeting.”
Crude oil for January delivery declined as much as 82 cents, or 1.1 percent, to $77.55 a barrel in electronic trading on the New York Mercantile Exchange. It traded for $78.06 at 1:08 p.m. London time. Prices have gained 74 percent this year.
Crude gained yesterday after reports yesterday showed signs of increased manufacturing output in the U.S. and China, which account for about 32 percent of global oil consumption.
The U.S. Energy Department will release its weekly supply report today in Washington. Inventories are forecast to decline, according to a Bloomberg News survey.
Energy Department
The Energy Department report is forecast to show that crude inventories fell 450,000 barrels, according to the survey. Oil- supply totals from the API and Energy Department moved in the same direction 75 percent of the time in the past four years, according to data compiled by Bloomberg.
“What is important here is that demand recovery was not as swift as expected, and this is also evident from overhanging crude and product stocks,” said Andrey Kryuchenkov, an analyst with VTB Capital in London. “We do not expect demand from the U.S. to reach pre-crisis levels until well into 2011.”
Inventories of distillate fuels, which include heating oil and diesel, rose 1.06 million barrels to 168 million, the API report showed. The Energy Department will probably say stockpiles fell 350,000 barrels last week, according to the Bloomberg News survey. Supplies are at 166.9 million barrels, the highest since January 1983.
The 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.
Yachtsmen Released
Five British yachtsmen detained by Iran’s navy in the Persian Gulf last week were released today, state-run media reported. Oil prices dropped about 50 cents a barrel after the news of the release.
Iran’s Revolutionary Guards Corps said questioning of the sailors made it clear they had entered Iranian waters by mistake, the Fars news agency reported.
Brent crude oil for January settlement was at $79.13 a barrel, down 22 cents, on the London-based ICE Futures Europe exchange at 1:10 p.m. London time.
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