MELBOURNE: Oil fell in New York, heading for a second weekly drop, after OPEC said that growth in global crude supplies is outpacing demand.
Futures slid as much as 0.7%, retreating for the seventh day in eight. The Organization of Petroleum Exporting Countries, scheduled to meet next month, is producing 8.3% more crude than it considers necessary this quarter, data released yesterday by the Vienna-based group showed. Oil may extend declines next week amid rising US stockpiles and concern Europe’s debt crisis will spread, threatening the global economic recovery, according to a Bloomberg survey.
Crude for June delivery fell as much as 72 cents to $96.36 a barrel in electronic trading on the New York Mercantile Exchange, and was at $96.46 at 9:24 a.m. Sydney time. The contract yesterday rose 27 cents to $97.08. Prices are 2.1 lower this week and down 2.4% this year.
Brent oil for June settlement slipped 47 cents, or 0.4%, to $112.73 a barrel on the London-based ICE Futures Europe exchange yesterday. The European benchmark contract’s premium to West Texas Intermediate closed at $15.65.
Eleven of 23 analysts surveyed by Bloomberg, or 48%, forecast oil will drop through May 18. Nine respondents, or 39%, predicted prices will be little changed and three estimated there will be a gain.
US crude inventories rose 3.7 million barrels last week to 379.5 million, the highest level since 1990, Energy Department data showed May 9. Greece has been unable to form a government since May 6 elections, raising the possibility that another vote will have to be held as early as next month. Spain’s government took control of the nation’s fourth-biggest lender this week as it starts its fourth bank cleanup in three years. (Bloomberg/T07)
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