Oil Little Changed After Falling on Gain in U.S. Fuel Supplies
June 25 (Bloomberg) -- Crude oil was little changed after falling yesterday when a government report showed that U.S. fuel supplies climbed more than forecast as refineries increased operating rates.
Gasoline inventories rose 3.87 million barrels to 208.9 million last week, the Department of Energy said. Stockpiles were forecast to increase by 1 million barrels, according to a Bloomberg News survey. Refineries operated at the highest rates this year and fuel demand fell 5.5 percent, the biggest drop since January.
“Rising inventories have got to be a little bit of a handbrake on the price,” said Peter McGuire, managing director of Commodity Warrants Australia Pty in Sydney. “There is nothing really there to support it going higher in the short term.”
Crude oil for August delivery fell 27 cents, or 0.4 percent, to $68.40 a barrel on the New York Mercantile Exchange at 10:34 a.m. in Sydney. Yesterday, the contract dropped 57 cents, or 0.8 percent, to settle at $68.67.
Supplies of distillate fuel, a category that includes heating oil and diesel, rose 2.08 million barrels to 152.1 million, the highest since January 1999. A 850,000-barrel gain was forecast, according to the median of 15 analysts surveyed.
Diesel stockpiles increased 2.18 million barrels to 111.6 million, the highest since at least 1993.
Dollar Gains
Gains in the U.S. currency also weighed on oil prices. “The U.S. dollar is having a big play in all of the commodity markets,” McGuire said. “It did rally strongly.”
The dollar was at $1.3928 against the euro at 6:02 a.m. in Tokyo following a 1.1 percent advance yesterday. A stronger dollar reduces the appeal of commodities as an alternative investment.
Refineries operated at 87.1 percent of capacity in the week ended June 19, up 1.2 percentage points from the previous week and the highest since the week ended Dec. 5, the Energy Department report showed.
Fuel consumption slipped 1.05 million barrels a day to 17.9 million last week, the report showed. Gasoline demand declined 225,000 barrels a day, or 2.4 percent, to 9.13 million barrels.
Crude oil inventories dropped 3.87 million barrels to 353.9 million, the lowest since March, the report showed. Stockpiles, which have fallen in six of the past seven weeks, are up 17 percent from a year earlier.
Gasoline for July delivery dropped 5.07 cents, or 2.7 percent, to end the session at $1.8425 a gallon in New York. It was the lowest settlement since May 22.
Iraq Oil
Eight of the world’s top 10 non-state oil producers, including Exxon Mobil Corp. and Royal Dutch Shell Plc, are vying for the right to help Iraq develop six oilfields and two natural-gas deposits. More than 30 companies in total are bidding for $16 billion worth of technical service contracts for producing fields that will be awarded in Baghdad on June 29-30.
The Organization for Economic Cooperation and Development producer is struggling to increase output and revenue from crude sales after six years of conflict and prior sanctions destroyed the country’s economy and infrastructure.
China Petrochemical Corp., known as Sinopec Group, will gain reserves in Iraq’s Kurdistan and West Africa upon completing its C$8.3 billion ($7.2 billion) bid for Addax Petroleum Corp.
Brent crude for August settlement declined 26 cents, or 0.4 percent, to $68.07 a barrel on London’s ICE Futures Europe exchange at 10:35 a.m. in Sydney. Yesterday, the contract dropped 0.7 percent to $68.33.
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