SINGAPORE - Oil slid from the highest close in more than two months as investors sold contracts on speculation that recent gains were excessive amid signs of weakening demand in the U.S, the world’s biggest consumer of crude.
Futures fell as much as 0.6 percent, dropping for the first time in four days. Oil’s gains stalled near the upper Bollinger Band, an indicator of technical resistance. Crude consumption declined 4 percent to 15.9 million barrels last week, the biggest percentage decrease in a month, data from the American Petroleum Institute showed. Gasoline usage was the lowest since February, according to the API figures.
“We’ll probably need to see further good news, further improvements in demand and the economic growth outlook for oil to move significantly higher,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “We have seen a strong rally off the bottom of a few weeks ago.”
Oil for September delivery decreased as much as 60 cents to $93.07 a barrel in electronic trading on the New York Mercantile Exchange and was at $93.16 at 2:50 p.m. Singapore time. It climbed 1.6 percent yesterday to $93.67, the highest settlement since May 15. The contract has rebounded 20 percent from its low this year of $77.69 on June 28 and gained 5.8 percent so far in August. Prices are 5.7 percent lower since the start of the year.
Brent crude for September settlement fell 65 cents, or 0.6 percent, to $111.35 a barrel on the London-based ICE Futures Europe exchange. The European benchmark’s premium to West Texas Intermediate was $18.20, down from $18.33 yesterday.
Oil in New York has technical resistance along the upper Bollinger Band on the daily chart, about $94.96 a barrel today, according to data compiled by Bloomberg. Futures yesterday halted their advance near this indicator. Sell orders tend to be clustered near chart-resistance levels.
U.S. gasoline demand last week was 3 percent less than a year ago, the 49th straight drop in that measure, according to MasterCard Inc.’s SpendingPulse report yesterday.
Crude inventories in the U.S. declined 5.4 million barrels last week, API data showed. An Energy Department report today may show supplies fell 1.6 million barrels, according to the median estimate of 10 analysts in a Bloomberg News survey. Gasoline stockpiles rose 417,000 barrels last week, the API said. The Energy Department report may show they fell 1.75 million barrels, according to the Bloomberg survey.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Ernesto, the second hurricane of the Atlantic season, moved inland over the southern coast of the Yucatan Peninsula, the National Hurricane Center said in an advisory. The Category 1 cyclone had top winds of 85 miles per hour, up from 65 mph earlier. The storm is expected to enter the Bay of Campeche, the location of Mexico’s biggest oil fields, later today.
The U.S. Energy Department raised its 2012 crude-price projection for the first time since April as global fuel consumption was forecast to increase. New York oil will average $93.90 a barrel this year, up 1.2 percent from the July forecast of $92.83, the department’s Energy Information Administration said in its monthly Short-Term Energy Outlook yesterday. The U.S. benchmark grade will average $90.25 in 2013, up 2 percent from last month’s estimate of $88.50.
Enbridge Energy Partners LP started crude Line 14 that was shut previously following a leak in Wisconsin, a company statement distributed by Marketwire showed yesterday. The system carries Canadian crude to refineries in the U.S. Midwest.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.