Oil Little Changed Near $69 After Drop on U.S. Fuel Supply Gain

July 2 (Bloomberg) -- Crude oil traded little changed near $69 a barrel after falling yesterday as a U.S. government report showed fuel supplies in the world’s biggest energy-consuming country rose more than forecast.

Gasoline stockpiles increased 2.33 million barrels to 211.2 million in the week ended June 26, the Energy Department said. Inventories were estimated to rise by 2 million barrels, according to a Bloomberg News survey.

“Supply and consumption remain really bad,” said Bill O’Grady, the chief markets strategist at St. Louis-based Confluence Investment Management LLC, an investment advisory and management firm. “It’s hard to make a bullish case for anything.”

Crude oil for August delivery gained 19 cents to $69.50 a barrel on the New York Mercantile Exchange at 9:14 a.m. in Sydney. Yesterday, the contract fell 58 cents, or 0.8 percent, to settle at $69.31. Prices are up 25 percent since the start of the year.

Oil in New York increased 41 percent last quarter, the biggest gain since 1990. Prices have rallied as rebounding world equity markets and a weaker dollar encouraged investors to buy the commodity as an alternative investment and inflation hedge.

The dollar was at $1.4149 against the euro at 6:22 a.m. in Tokyo following a 0.8 percent decline.

Total U.S. daily fuel demand in the four weeks ended June 26 was down 5.8 percent from a year earlier, the Energy Department said yesterday. Gasoline consumption averaged 9.17 million barrels a day, up 0.9 percent. Distillate-fuel demand over the period fell 9.4 percent to 3.4 million barrels a day.

Distillate Fuels

Stockpiles of distillate fuel, a category that includes diesel and heating oil, gained 2.9 million barrels to 155 million, the highest since 1987. Distillate-fuel supplies were forecast to increase 1.5 million barrels, according to the median of 15 analyst responses in the Bloomberg News survey.

Gasoline for August delivery rose 0.33 cents to $1.8623 a gallon at 8:46 a.m. in Sydney. Yesterday, it declined 4.3 cents, or 2.3 percent, to end the session at $1.859 in New York.

Crude oil supplies fell 3.66 million barrels to 350.2 million, the report showed. Inventories have dropped 15.8 million barrels in the past four weeks, the biggest four-week decline in a year. Stockpiles last week were 8 percent higher than the five-year average for the period, the department said.

The Organization of Petroleum Exporting Countries increased production for a third month in June, a Bloomberg News survey showed yesterday. Oil output averaged 28.23 million barrels a day last month, up 55,000 from May, according to the survey of oil companies, producers and analysts. The 11 OPEC members with quotas, all except Iraq, pumped 25.86 million barrels a day, 1.015 million more than their target.

Brent crude oil for August settlement declined 51 cents, or 0.7 percent, to end yesterday’s session at $68.79 a barrel on London’s ICE Futures Europe exchange.