Oil Falls for Sixth Day as Equities Drop, Gasoline Supply Gains

July 8 (Bloomberg) -- Crude oil fell, poised for the longest losing streak since December, as equities slumped and an industry report showed an increase in U.S. fuel inventories.

Oil declined for a sixth day after the American Petroleum Institute said gasoline supplies rose 767,000 barrels to 212.4 million last week. U.S. stocks fell on concern technology spending will slow and second-quarter earnings will fail to justify a four-month rally in equities.

“A negative earnings outlook for the second quarter swept over the equities markets, helping to push oil lower,” said Mike Sander, an investment adviser with Sander Capital in Seattle. “The market is experiencing a push to go lower with a combination of over supply and negative economic sentiment.”

Crude oil for August delivery fell as much as 88 cents, or 1.4 percent, to $62.05 a barrel on the New York Mercantile Exchange, the lowest since May 26. Oil was at $62.16 at 10:28 a.m. in Sydney.

Oil in New York has declined 15 percent from an eight-month high of $73.38 reached June 30 as lower U.S. payrolls raised concern that the economy of the world’s biggest energy-consuming country will be slow to recover.

The Standard & Poor’s 500 Index fell yesterday to the lowest level since May 1, dropping 2 percent to 881.03 in New York. The Dow Jones Industrial Average lost 161.27 points, or 1.9 percent.

Oil Lower

“If it is the middle of July and the U.S. consumer has excess supply of gas, then expect prices to start heading lower,” Sander said.

Crude oil inventories dropped 1.4 million barrels to 348.3 million, according to the API report. Stockpiles of distillate fuel, a category that includes heating oil and diesel, climbed 3.42 million barrels to 158 million, the highest since 1985.

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.

Gasoline inventories rose 900,000 barrels last week, according to a Bloomberg News survey conducted before today’s Energy Department report. The Department is scheduled to release its Weekly Petroleum Status Report at 10:30 a.m. in Washington.

Gasoline for August delivery declined 2.18 cents, or 1.3 percent, to $1.7110 a gallon at 10:23 a.m. in New York. Yesterday, it fell 0.76 cent, or 0.4 percent, to end the session at $1.7328.

Oil also fell as the dollar advanced against the euro, reducing the appeal of commodities as an inflation hedge. The euro traded at $1.3906 at 10:19 a.m. Sydney time from $1.3924 yesterday and $1.4142 on July 1.

Brent crude for August settlement declined 71 cents, or 1.1 percent, to $62.52 a barrel at 10:18 a.m. in Sydney on London’s ICE Futures Europe exchange. Yesterday, Brent fell 1.3 percent to $63.23, the lowest settlement price since May 27.