Oil Falls a Second Day on Declining U.S. Fuel Demand, Dollar
March 19 (Bloomberg) -- Crude oil dropped for a second day in New York amid concern fuel demand in the U.S., the world’s biggest energy consumer, was slipping and as a firmer dollar damped the investment appeal of commodities.
Oil traded below $82 a barrel after the dollar gained against the euro on speculation Greece may fail to secure financial assistance from the European Union. Commercially held U.S. crude inventories rose last week to the highest since August, the Energy Department said March 17.
“There are some further concerns about the prospects for Greece so the euro fell against the U.S. dollar,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. The Energy Department data also showed “a little bit of softness in the product demand.”
Crude oil for April delivery fell as much as 48 cents, or 0.6 percent, to $81.72 a barrel in electronic trading on the New York Mercantile Exchange. It was at $81.81 at 9:20 a.m. Singapore time. Yesterday, the contract lost 0.9 percent to settle at $82.20, ending a two-day climb. Futures are set for a 0.7 percent gain this week.
The dollar was little changed against the 16-nation euro after rising for a second day to $1.3608 yesterday in New York. Greek Prime Minister George Papandreou said he may turn to the International Monetary Fund to overcome Greece’s debt crisis unless EU leaders agree to set up a lending facility at a summit next week.
U.S. crude stockpiles increased for a seventh week to 344 million barrels, 5 percent above the five-year average, the Energy Department said. Fuel demand declined by 4.2 percent to 18.8 million barrels a day, the biggest one-week drop since November.
Saudi Arabia
Oil also retreated as U.K. Prime Minister Gordon Brown said the U.K. and France are pressing Saudi Arabia to produce more crude. The kingdom is the largest producer in the Organization of Petroleum Exporting Countries. Brown said he discussed the subject with French President Nicholas Sarkozy last week.
OPEC, a 12-member group that pumps 40 percent of the world’s oil, maintained supply targets at a March 17 meeting in Vienna. Prices are “beautiful” and there’s no reason to change output quotas, said Saudi Arabia’s oil minister Ali al-Naimi.
OPEC is set to increase crude shipments at the end of this month, according to a report yesterday by tanker tracker Oil Movements. The group will ship 23.2 million barrels a day in the four weeks to April 3, up 0.3 percent from the four weeks to March 6, said the Halifax, England-based consultant.
Brent crude for May settlement on the London-based ICE Futures Europe exchange fell as much as 44 cents, or 0.5 percent, to $81.04 a barrel. It was at $81.10 at 9:10 a.m. Singapore time.
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