Oil May Fall Amid Rising Fuel Supplies, Survey Shows

Sept. 25 (Bloomberg) -- Crude oil futures may decline in anticipation of extended increases in U.S. fuel supplies as demand drops.

Twenty-four of 44 analysts surveyed by Bloomberg News, or 55 percent, said futures will drop through Oct. 2. Seven respondents, or 16 percent, forecast that the market will rise and 13 said prices will be little changed. Last week, 38 percent of analysts said oil would fall.

“Prices, and especially refining margins, will continue to decline next week in light of swelling product inventories in the U.S. and Europe,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston.

U.S. gasoline stockpiles surged 5.41 million barrels last week, more than 10 times what was forecast by analysts in a Bloomberg News survey, according to an Energy Department report on Sept. 23. Supplies of distillate fuel, a category that includes heating oil and diesel, rose 2.96 million barrels, almost double what was estimated.

U.S. fuel consumption dropped 3.3 percent to 18.5 million barrels a day, the lowest since the week ended June 26. Gasoline use slipped 2.3 percent to 8.79 million barrels a day, the lowest since January.

Crude oil for November delivery fell $6.47, or 8.9 percent, to $66.02 a barrel this week on the New York Mercantile Exchange. Oil has climbed 48 percent this year and has slipped 55 percent from a record $147.27 reached on July 11, 2008.

The oil survey has correctly predicted the direction of futures 47 percent of the time since its start in April 2004.

Bloomberg’s survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:

RISE NEUTRAL FALL
7 13 24