NEW YORK: Brent oil fell to a five-month low on speculation that US crude stockpiles climbed to the highest level since 1990 and as the euro weakened on concern that the debt crisis will overwhelm Spain.
The Brent contract, Europe's benchmark, dropped below $105 a barrel and crude in New York tumbled to the lowest level since October. An Energy Department report on Thursday is projected to show that US supplies rose 1 million barrels to 383.5 million last week, according to analysts surveyed by Bloomberg. The euro fell versus the dollar as Spain's default risk increased.
"We're looking at a build of another million barrels to a 22-year high," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. "Given how high inventories are and how weak the economy looks, no wonder we're trading lower. We're going to probably continue seeing dollar strength, which will keep the pressure on oil."
Brent oil for July settlement declined $2.33, or 2.2%, to $104.35 a barrel on the London-based ICE Futures Europe exchange at 9:25 am in New York. The contract touched $104.28, the lowest level since December 20. Oil for July delivery fell $1.91, or 2.1%, to $88.85 a barrel on the New York Mercantile Exchange.
Futures reached $88.70, the lowest intraday level since October 24. Prices are down 15% this month, the biggest drop since December 2008. US gasoline stockpiles probably fell 7,50,000 barrels last week, according to the median of 10 analyst estimates in the Bloomberg survey.
Supplies of distillate fuel, a category that includes heating oil and diesel, are forecast to rise 2,50,000 barrels, the survey shows. The American Petroleum Institute will release separate inventory data late on Wednesday
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The Brent contract, Europe's benchmark, dropped below $105 a barrel and crude in New York tumbled to the lowest level since October. An Energy Department report on Thursday is projected to show that US supplies rose 1 million barrels to 383.5 million last week, according to analysts surveyed by Bloomberg. The euro fell versus the dollar as Spain's default risk increased.
"We're looking at a build of another million barrels to a 22-year high," said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. "Given how high inventories are and how weak the economy looks, no wonder we're trading lower. We're going to probably continue seeing dollar strength, which will keep the pressure on oil."
Brent oil for July settlement declined $2.33, or 2.2%, to $104.35 a barrel on the London-based ICE Futures Europe exchange at 9:25 am in New York. The contract touched $104.28, the lowest level since December 20. Oil for July delivery fell $1.91, or 2.1%, to $88.85 a barrel on the New York Mercantile Exchange.
Futures reached $88.70, the lowest intraday level since October 24. Prices are down 15% this month, the biggest drop since December 2008. US gasoline stockpiles probably fell 7,50,000 barrels last week, according to the median of 10 analyst estimates in the Bloomberg survey.
Supplies of distillate fuel, a category that includes heating oil and diesel, are forecast to rise 2,50,000 barrels, the survey shows. The American Petroleum Institute will release separate inventory data late on Wednesday
NEAL 9999974733
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