Crude Oil Trades Below $80 After Report Shows Stockpile Gain

Jan. 14 (Bloomberg) -- Oil traded below $80 a barrel in New York after declining as a government report showed that supplies of crude and fuels increased as demand dropped in the U.S., the world’s biggest energy consumer.

Oil fell 1.4 percent yesterday after the Energy Department said crude inventories rose last week by more than twice as much as the median of analyst forecasts in a Bloomberg News survey. Supplies of distillate fuels, including heating oil and diesel, gained in contrast with estimates that they would drop.

“The distillate number was an absolute shocker,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. “These are bearish numbers, with plus signs in front of the three major categories.”

Crude oil for February delivery was unchanged at $79.65 a barrel in electronic trading on the New York Mercantile Exchange at 10:29 a.m. Sydney time. Yesterday, the contract fell $1.14 to $79.65, the lowest settlement since Dec. 31.

Distillate fuel inventories increased by 1.35 million barrels to 160.4 million, the department said in Washington yesterday. That compares with the drop of 1.3 million barrels expected by 18 analysts surveyed by Bloomberg. Supplies were forecast to decline as record-cold weather in the U.S. last week boosted heating-fuel demand.

Oil supplies rose by 3.7 million barrels last week to 331 million. Inventories were forecast to rise by 1.5 million barrels. Fuel demand averaged over the past four weeks decreased 0.9 percent.

Oil Decline

Oil has dropped 3.7 percent in the past four days, the longest decline in more than four weeks. China, the world’s fastest-growing major economy and second-biggest oil consumer, raised bank reserve requirements for the first time since 2008 to curb a credit boom and prevent the economy from overheating.

Oil also fell after a government report showed the German economy probably stagnated in the fourth quarter of 2009, capping the worst year for Europe’s largest economy since World War II, according to the Federal Statistics Office.

U.K. manufacturing unexpectedly stalled for a second month in November, a sign the economy is struggling to shake off the longest recession on record, the Office for National Statistics reported yesterday in London.

Brent crude for February settlement fell 99 cents, or 1.2 percent, to $78.31 a barrel on the London-based ICE Futures Europe exchange yesterday, its fifth consecutive decline. The February contract expires today.