Crude Oil Falls as U.S. Stockpiles Gain Amid Slumping Demand

April 1 (Bloomberg) -- Oil fell below $50 a barrel, after capping its biggest monthly gain since May, on speculation that a government report today will show U.S. inventories rose from the highest level in more than 15 years as fuel demand slows.

The industry-based American Petroleum Institute said yesterday that crude oil supplies rose last week to the highest since July 1993. Figures from the API and the U.S. Energy Department have moved in the same direction 75 percent of the time. The Bank of Japan’s Tankan index of sentiment among manufacturers fell to a record low of minus 58.

“The API numbers will be used as a guide for what the Energy Department numbers will show so the gain there will be viewed as a negative for the oil price,” said David Moore, a commodity strategist at Commonwealth Bank of Australia in Sydney. “The consumption side is still weak and that’s likely to remain the case.”

Crude oil for May delivery fell as much as $1.38, or 2.8 percent, to $48.28 a barrel in electronic trading on the New York Mercantile Exchange. It was at $48.48 a barrel at 9:23 a.m. Singapore time. It has slumped 52 percent in the past year.

Oil rose $1.25, or 2.6 percent, yesterday to $49.66 a barrel as equities increased and a weaker dollar enhanced the appeal of commodities. Crude gained 11 percent in the first quarter after tumbling 56 percent in the previous three months. Last month’s 11 percent increase was the biggest on a monthly basis since a 12 percent jump in May.

Oil Stockpiles

The API report showed that crude oil supplies climbed to 357.8 million barrels last week. It also said that distillate stocks, including diesel fuel and heating oil, rose 1.78 million barrels, or 1.2 percent, to 144.5 million barrels, the highest since Jan. 12, 2007.

The Energy Department is scheduled to release its weekly supply update at 10:30 a.m. today in Washington. The report is forecast to show that inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, dropped.

Brent crude oil for May settlement fell as much as $1.32, or 2.7 percent, to $47.91 a barrel on London’s ICE Futures Europe exchange. It was at $48.10 a barrel at 9:25 a.m. Singapore time. The contract rose 61 cents, or 1.3 percent, yesterday to $48.60 a barrel.