Oil Trades Below $77 on Renewed Concern Europe Crisis to Spread

June 25 (Bloomberg) -- Crude oil traded below $77 a barrel in New York, poised for the first weekly decline in three, on renewed concern the European debt crisis may slow the global economic recovery.

Oil rose 0.2 percent yesterday as U.S. durable goods orders meant to last three years climbed in May and after applications for jobless benefits fell from a two-month high last week. Stocks fell on concern the European debt crisis will hinder global growth. The Standard & Poor’s 500 Index dropped for a fourth day, the longest losing streak in seven weeks.

“The macro mood is still cautious,” said Toby Hassall, a commodity analyst at CWA Global Markets Pty in Sydney. “The durable goods numbers offered some positives for the demand outlook for oil. I doubt whether crude can rally without general market sentiment improving.”

Crude oil for August delivery was at $76.43 a barrel, down 8 cents, in electronic trading on the New York Mercantile Exchange at 8:22 a.m. Singapore time. Yesterday, the contract gained 16 cents to settle at $76.51. Futures are poised for a 1 percent drop this week, and are down 3.7 percent this year.

Order for goods, excluding autos and aircraft, gained 0.9 percent in the U.S. last month, the third increase in four months, according to the Commerce Department. The number of Americans applying for jobless benefits declined by 19,000 last week to 457,000, the Labor Department said.

The S&P 500 fell 1.7 percent to 1,073.69, and the Dow Jones Industrial Average lost 1.4 percent to 10,152.80 as the rising cost to protect Greece from default spurred concern that the pace of the European recovery will slow.

Brent crude oil for August delivery was at $76.41 a barrel, down 6 cents, on the ICE Futures Europe exchange in London at 8:08 a.m. Singapore time. Prices climbed 0.3 percent to close at $76.47 yesterday.

Palm Oil May Decline as Malaysia Output Grows, KL Kepong Says

June 25 (Bloomberg) -- Palm oil prices may extend declines as production in Malaysia picks up, the country’s third-largest listed plantation company said.

“We are moving gradually into higher production in Peninsular Malaysia,” with output in Borneo’s Sabah state expected to increase from August, Roy Lim, a director Kuala Lumpur Kepong Bhd., said in an e-mail interview. “We expect yields to rise up till October or November,” Lim said.

Rising production may extend a drop in palm oil futures, which have lost 10 percent this year amid a record global crop of rival oilseeds. Palm oil for September delivery on the Malaysia Derivatives exchange closed at 2,390 ringgit ($738) a ton in Kuala Lumpur yesterday.

About 90 percent of palm oil, the world’s cheapest edible oil, is produced in Indonesia and Malaysia. Dry weather late last year and early this year caused by the El Nino weather phenomenon stressed oil palms, helping drive a 57 percent rally in prices in 2009.

So far there is “not much supply pressure yet as stocks are low, but they will gradually increase,” Lim said. While prices must fall to stimulate demand, “low stocks and festive demand will ensure they do not crash,” Lim said. Oil palms usually produce about 55 percent of their annual output in the second half.

Palm oil stockpiles in Malaysia shrank for a fifth month in May from April as exports gained. Inventory fell 3.7 percent to 1.56 million tons, the Malaysian Palm Oil Board said on June 10. Output rose 6.1 percent to 1.39 million tons while exports expanded 6 percent to 1.36 million tons.

Palm oil demand typically picks up in the third quarter with major festivities in China, India, Pakistan and Indonesia, the most populous Asian countries.

Oil Trades Below $77 on Renewed Concern Europe Crisis to Spread

June 25 (Bloomberg) -- Crude oil traded below $77 a barrel in New York, poised for the first weekly decline in three, on renewed concern the European debt crisis may slow the global economic recovery.

Oil rose 0.2 percent yesterday as U.S. durable goods orders meant to last three years climbed in May and after applications for jobless benefits fell from a two-month high last week. Stocks fell on concern the European debt crisis will hinder global growth. The Standard & Poor’s 500 Index dropped for a fourth day, the longest losing streak in seven weeks.

“The macro mood is still cautious,” said Toby Hassall, a commodity analyst at CWA Global Markets Pty in Sydney. “The durable goods numbers offered some positives for the demand outlook for oil. I doubt whether crude can rally without general market sentiment improving.”

Crude oil for August delivery was at $76.43 a barrel, down 8 cents, in electronic trading on the New York Mercantile Exchange at 8:22 a.m. Singapore time. Yesterday, the contract gained 16 cents to settle at $76.51. Futures are poised for a 1 percent drop this week, and are down 3.7 percent this year.

Order for goods, excluding autos and aircraft, gained 0.9 percent in the U.S. last month, the third increase in four months, according to the Commerce Department. The number of Americans applying for jobless benefits declined by 19,000 last week to 457,000, the Labor Department said.

The S&P 500 fell 1.7 percent to 1,073.69, and the Dow Jones Industrial Average lost 1.4 percent to 10,152.80 as the rising cost to protect Greece from default spurred concern that the pace of the European recovery will slow.

Brent crude oil for August delivery was at $76.41 a barrel, down 6 cents, on the ICE Futures Europe exchange in London at 8:08 a.m. Singapore time. Prices climbed 0.3 percent to close at $76.47 yesterday.

Oil Falls a Third Day on Gain in U.S. Supplies, Home Sales Drop

June 24 (Bloomberg) -- Crude oil declined for a third day in New York after U.S. government reports showed an unexpected gain in supplies and a decline in purchases of new homes.

Oil dropped 1.9 percent yesterday after the Energy Information Administration reported crude stockpiles rose 2.02 million barrels to 365.1 million in the week ended June 18. Supplies were forecast to drop 800,000 barrels, according to analysts surveyed by Bloomberg News. Sales of new homes declined in May to a record low as a tax credit expired.

“Sentiment is still pretty weak,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “The fall seems mostly due to the EIA data. On the demand front, it’s still negative and still very uncertain.”

Crude oil for August delivery dropped as much as 42 cents, or 0.6 percent, to $75.93 a barrel in electronic trading on the New York Mercantile Exchange. It was at $76.14 at 9:56 a.m. Sydney time. Yesterday, the contract fell $1.50 to $76.35, the biggest drop for a front-month contract since June 11.

“There are still many weak sectors in the U.S. economy,” said Mike Sander, an investment adviser at Sander Capital Advisors in Seattle. “Prices should remain depressed. There could be a bit more room to go to the downside.”

Sales of new homes slipped to an annual pace of 300,000 last month from April, less than the median estimate of economists surveyed by Bloomberg News and the fewest in data going back to 1963, figures from the Commerce Department showed yesterday in Washington.

Interest Rates

Federal Reserve officials retained a pledge to keep the benchmark interest rate at a record low and signaled that European indebtedness may harm U.S. growth. Fed Chairman Ben S. Bernanke is trying to cut unemployment that’s close to a 26- year-high and maintain the recovery as new-home sales slide and growth in private payrolls weakens.

Imports of crude oil climbed 4.3 percent to 10.1 million barrels a day, the highest level since the week ended Jan. 2, 2009, the Energy Department report showed. Fuel imports surged 10 percent to 2.32 million barrels a day.

Gasoline supplies fell 762,000 barrels to 217.6 million last week, the report showed. An 180,000-barrel drop was forecast, according to the median of 15 responses in the Bloomberg News survey.

Refineries operated at 89.4 percent of capacity, up 1.5 percentage points from the prior week and the highest level since April, the report showed.

Brent crude oil for August delivery slipped $1.77, or 2.3 percent, to end the session at $76.27 a barrel on the London- based ICE Futures Europe exchange yesterday.

Slower Demand Growth

The International Energy Agency, an adviser to oil- consuming nations, said in a report yesterday that growth in world oil demand will slow in the next five years as the pace of Chinese consumption moderates.

The IEA estimates that the rate of annual demand growth will shrink each year between now and 2015. Consumption will climb 1 percent to 91.93 million barrels a day in 2015, down from 1.5 percent growth in 2010, according to the Paris-based agency’s Medium-Term Oil and Gas Markets 2010 report.

Chinese oil demand is expected to reach 11.63 million barrels a day by 2015, up from 9.16 million this year, according to the IEA data. The pace is slowing, with consumption rising 4.1 percent in 2015, compared with 7.6 percent this year, according to the report.

The rate of consumption decline in developed economies is accelerating. Total demand from the 30 industrialized countries that belong to the Organization for Economic Cooperation and Development will drop 0.9 percent in 2015 compared with a 0.1 percent fall in 2010, the agency estimates.

Gold Falls as Dollar Gain Curbs Demand for Alternative Asset

June 23 (Bloomberg) -- Gold futures fell to a one-week low on speculation the dollar’s rally will erode demand for the precious metal as an alternative asset.

The greenback headed for the fourth straight gain against a basket of six major currencies. Before today, gold rose 13 percent this year, reaching a record $1,266.50 an ounce on June 21, on demand for a haven amid Europe’s sovereign-debt woes.

“Now that the euro has stabilized, the focus is back on the dollar-and-gold relationship,” said Frank Lesh, a trader at FuturePath Trading LLC in Chicago. “There’s just not enough fear and panic to send gold flying. There’s a little disappointment among recent longs that gold is just backing and filling, instead of advancing after making an all-time high.”

Gold futures for delivery in August dropped $6, or 0.5 percent, to $1,234.80 on the Comex in New York. Earlier, the metal touched $1,225.20, the lowest level for a most-active contract since June 15.

Gold has historically moved inversely to the dollar. This year, the metal climbed to records in euros, U.K. pound and Swiss francs.

Before today, the euro climbed 3.3 percent from a four-year low on June 7.

“It is becoming apparent that at least some of the aggressiveness among speculators as regards to pouncing upon the euro and piling further into bullion is on the decline,” said Jon Nadler, a senior analyst at Kitco Inc. in Montreal.

Silver futures for July delivery dropped 44.3 cents, or 2.3 percent, to $18.504 an ounce, the biggest drop since June 4.

Platinum futures for October delivery fell $27.40, or 1.7 percent, to $1,574.70 an ounce on the New York Mercantile Exchange, the largest decline in four weeks.

Palladium futures for September delivery tumbled $15.60, or 3.2 percent, to $474.35 an ounce.

Oil Falls a Second Day as U.S. Stockpiles Rise, Home Sales Drop

June 23 (Bloomberg) -- Crude oil fell for a second day in New York after an industry report showed an increase in crude supplies and sales of existing U.S. homes unexpectedly declined in May, signaling the economy is struggling to recover.

Oil dropped after purchases of previously owned houses in the U.S. fell 2.2 percent, missing expectations. The American Petroleum Institute said crude stockpiles climbed 3.69 million barrels last week. An Energy Department report today may show inventories declined by 800,000 barrels.

“Sentiment remains very fragile,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “Confidence has been rattled in recent months by European fiscal issues and by data in the U.S. that’s been uneven. They’re factors that have left markets cautious.”

Crude oil for August delivery dropped as much as 49 cents, or 0.6 percent, to $77.36 a barrel in electronic trading on the New York Mercantile Exchange, and was at $77.37 at 8:45 a.m. Singapore time. Yesterday, the contract lost 76 cents, or 1 percent, to $77.85.

The July contract fell 61 cents, or 0.8 percent, to settle at $77.21 when it expired at the close of floor trading. Oil has risen 12 percent in the past year.

The API data showed “crude stocks were up quite a bit, distillate stocks were up, and gasoline supplies were up,” Commonwealth Bank of Australia’s Moore said. “I don’t think the oil market is tight at present. Inventories remain high.”

Crude Inventories

U.S. crude oil inventories probably dropped 800,000 barrels in the seven days ended June 18 from 363.1 million the week before, according to the median of 15 analyst estimates surveyed by Bloomberg News.

Crude oil extended declines after a New Orleans federal judge lifted the six-month moratorium on deepwater drilling imposed by President Barack Obama following the largest oil spill in U.S. history.

Obama temporarily halted all drilling in waters deeper than 500 feet on May 27 to give a presidential commission time to study improvements in the safety of offshore operations. More than a dozen Louisiana offshore service and supply companies sued U.S. regulators to lift the ban. The government said it would appeal the decision.

U.S. home sales decreased to a 5.66 million annual rate in May from 5.79 million in April, figures from the National Association of Realtors showed yesterday in Washington. They were forecast to rise to a 6.12 million rate, according to the median estimate of 74 economists in a Bloomberg News survey.

Brent crude for August delivery traded at $77.80 a barrel, down 24 cents, on the ICE Futures Europe exchange in London at 8:06 a.m. in Singapore. Yesterday, the contract dropped 78 cents, or 1 percent, to $78.04.

Crude Oil Declines as Optimism Over China’s Currency Move Fades

June 22 (Bloomberg) -- Crude oil declined for the first time in three days as optimism faded that China’s plan to add more flexibility in the yuan’s fixed exchange rate would strengthen the global economic recovery.

Oil gave up yesterday’s gains as U.S. stocks fell and the dollar rose against the euro, limiting investors’ need for commodities to hedge against inflation. The People’s Bank of China said June 20 that it’s abandoning the yuan peg adopted during the global financial crisis to shield exporters.

“I don’t think an increase in the value of the yuan will increase China’s demand for oil,” said Mike Sander, an investment adviser at Sander Capital Advisors in Seattle.

Crude oil for July delivery dropped 57 cents, or 0.7 percent, to $77.25 a barrel in electronic trading on the New York Mercantile Exchange at 8:00 a.m. Sydney time. Yesterday, the contract rose 64 cents, or 0.8 percent, to $77.82.

China, the world’s most-populous nation, consumes more oil than any country except the U.S. China’s central bank said there’s no basis for “large-scale” moves in its currency even as it pledged increased exchange-rate flexibility.

The dollar traded little changed at $1.2320 a euro at 8:41 a.m. Sydney time, after climbing 0.6 percent yesterday.

U.S. inventories of crude oil probably dropped 1 million barrels last week, according to the median of 10 analyst estimates in a Bloomberg News survey before an Energy Department report tomorrow.

Brent crude for August settlement advanced 60 cents, or 0.8 percent, to $78.82 on the ICE Futures Europe exchange in London yesterday.

Crude Oil Gains a Second Day on Signs of Increased U.S. Demand

June 21 (Bloomberg) -- Crude oil rose for a second day in New York amid signs of increased fuel demand in the U.S., the biggest energy consuming nation.

Oil for July delivery gained 74 cents, or 1 percent, to $77.92 a barrel on the New York Mercantile Exchange at 9:03 a.m. Sydney time. Prices increased 4.6 percent last week, advancing for a second week, along with equities.

Oil may rise this week after U.S. gasoline demand climbed 1.6 percent to 9.34 million barrels a day, the highest level since August, according to a Bloomberg News survey. Eleven of 21 analysts, or 52 percent, predicted crude will increase.

On June 18, oil gained 39 cents, or 0.5 percent, to settle at $77.18 a barrel in New York. The Standard & Poor’s 500 Index rose to the highest level in a month.

Brent crude for August settlement gained 84 cents, or 1.1 percent, to $79.06 a barrel on the ICE Futures Europe exchange in London. It dropped 46 cents, or 0.6 percent, to $78.22 a barrel on June 18.

Tighter regulation after the BP Plc oil spill in the Gulf of Mexico may delay exploration projects and cut global output by as much as 900,000 barrels a day if a moratorium on deep- water drilling spreads beyond the U.S., Nobuo Tanaka, executive director of the International Energy Agency, said June 18.