Oil Trades Below $76 After Falling as U.S. Stockpiles Increase

May 13 (Bloomberg) -- Crude oil traded below $76 a barrel in New York after declining as a U.S. government report showed that inventories climbed for the 14th time in 15 weeks as refiners reduced processing rates.

Oil dropped 0.9 percent yesterday after the Energy Department said U.S. crude supplies gained 1.95 million barrels last week to 362.5 million. Stockpiles at Cushing, Oklahoma, where the New York-traded West Texas Intermediate oil grade is stored, rose to a record. The International Energy Agency cut its estimate of world oil demand this year by 220,000 barrels to 86.4 million barrels a day in a monthly report.

“The big stockpiles at Cushing continue to get bigger,” Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, said by telephone today. “The fundamentals don’t look particularly good. The IEA have also trimmed their forecast for oil demand, and while that won’t in itself play with the market too much, it may temper some of the expectations of a recovery.”

Crude oil for June delivery traded at $75.66 a barrel, up 1 cent, in electronic trading on the New York Mercantile Exchange at 9:45 a.m. Sydney time. Yesterday, the contract fell 72 cents to $75.65 a barrel, the lowest settlement since May 7.

Inventories at Cushing increased 784,000 barrels to 37 million, the highest level since the department began reporting on supplies at the hub in April 2004.

U.S. crude oil stockpiles were forecast to increase 1.6 million barrels, according to the median of 17 analysts in a Bloomberg News survey.

Refinery Rates

Refineries operated at 88.4 percent of capacity, down 1.2 percentage points from the prior week and the first decline since March, the Energy Department report showed.

Gasoline inventories fell 2.81 million barrels to 222.1 million last week, the report showed. Supplies of gasoline were forecast to increase by 400,000 barrels, according to the Bloomberg News survey.

The Organization of Petroleum Exporting Countries bolstered oil output by 40,000 barrels a day in April, according to the IEA. Supplies from the 11 members bound by quotas rose to 26.79 million barrels a day, 70,000 barrels a day more than in March. That means the group’s compliance with the record output cuts slipped to 54 percent last month. Iraq has no output target.

OPEC members will need to pump 28.7 million barrels a day to balance global oil demand and supply this year, according to the IEA. That is 400,000 barrels fewer than the Paris-based agency estimated last month.

Brent crude oil for June settlement rose 71 cents, or 0.9 percent, to $81.20 on the London-based ICE Futures Europe exchange yesterday.