Oil Little Changed in New York Before Report on U.S. Supplies

March 11 (Bloomberg) -- Crude oil was little changed in New York, after declining 2.9 percent yesterday, amid speculation a government report later today will show U.S. inventories gained as demand weakened.

The Energy Department may say that supplies rose 250,000 barrels last week, according to the median of 14 analyst responses in a Bloomberg News survey. World oil consumption will average 84.27 million barrels a day this year, down 1.38 million barrels from 2008, the department reported yesterday.

“Six months ago people were talking about insufficient supply, now we have more oil than we know what to do with,” said Chip Hodge, a managing director at MFC Global Investment Management in Boston, who oversees a $9 billion natural- resource-company bond portfolio. “Until there is concrete evidence that the economy is improving, oil isn’t going to get much higher.”

Crude oil for April delivery fell 5 cents, or 0.1 percent, to $45.66 a barrel at 10:00 a.m. Sydney time on the New York Mercantile Exchange. Yesterday, futures fell $1.36 to settle at $45.71 a barrel. Prices are up 2.5 percent so far this year.

An inventory gain today would be the 20th in 24 weeks. The Energy Department will release its weekly report at 10:30 a.m. in Washington.

The industry-funded American Petroleum Institute said supplies fell 419,000 barrels to 345.3 million barrels last week, in a report released yesterday in Washington after the close of trading.

OPEC Meeting

The Organization of Petroleum Exporting Countries has reduced output three times since September. Ministers meet in Vienna on March 15.

OPEC must comply fully with existing reduction agreements before making new ones, Qatar’s oil minister said. Saudi Arabia wants OPEC to comply with its output ceiling and opposes a further curtailment in production, al-Hayat newspaper reported, citing an unidentified person.

“We cannot discuss another cut until we see the compliance at 100 percent,” Qatari Oil Minister Abdullah bin Hamad al- Attiyah said yesterday in Doha, the country’s capital. “The first step is to make sure we see full compliance.”

The 11 OPEC members with quotas, all except Iraq, produced 25.39 million barrels a day in February, down from 29.22 million barrels a day in September, according to a Bloomberg News survey of oil companies, producers and analysts.

The group agreed to pump 24.845 million barrels a day starting Jan. 1. Saudi Arabia, Kuwait, Qatar and the United Arab Emirates are producing less than their targets.

‘Weak’ Markets

“There’s still uncertainty about what OPEC will do this weekend even though the Saudis have made it clear they’re not for a cut,” said Rick Mueller, a director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “The Saudis are already producing less than their quota and will want to see the others pull their weight before agreeing to another cut.”

Oil markets remain “weak” because of the worsening global economy, and OPEC is concerned about the implications for future investment, Jose Maria Botelho de Vasconcelos, the group’s president, said in a statement issued in Luanda, Angola, yesterday.

“The deep impact of the economic turmoil on the world oil market is evident with its continuing contraction, and it pressures the market with high oil stocks despite OPEC measures,” de Vasconcelos said.

Jobless Rate

Oil prices in New York have dropped 69 percent from a record $147.27 on July 11 as the U.S., Europe and Japan face a simultaneous recession that’s cut fuel demand. The U.S. jobless rate will reach 9.4 percent this year and remain elevated through at least 2011, threatening the nation’s longer-term growth potential, a Bloomberg News survey of economists indicated.

Gasoline stockpiles probably dropped 1 million barrels in the week ended March 6 from 215.5 million the week before, according to the Bloomberg News survey. Supplies of distillate fuel, a category that includes heating oil and diesel, probably rose 200,000 barrels.

Gasoline futures for April delivery declined 3.79 cents, or 2.8 percent, to end the session at $1.2972 a gallon in New York. Heating oil for April delivery fell 1.67 cents, or 1.4 percent, to settle at $1.1987.

The average U.S. pump price for regular gasoline dropped 0.4 cent to $1.941 a gallon yesterday, AAA, the nation’s largest motorist organization, said on its Web site. Prices have declined 53 percent from the record $4.114 a gallon reached in July.