Oil prices declined as traders sold contracts to lock in the 4.5% gain from yesterday
Oil Falls From Record $100.10 on Speculation Stockpiles Gained
By Christian Schmollinger
Feb. 20 (Bloomberg) -- Crude oil fell from a record $100.10 a barrel in New York on speculation that a U.S. Energy Department report will show stockpiles rose for a sixth week.
Oil prices declined as traders sold contracts to lock in the 4.5 percent gain from yesterday, when it closed over $100 a barrel for the first time. Inventories probably climbed to 303.4 million barrels in the week ended Feb. 15 from 301.1 million barrels as heating-fuel use slows, according to responses in a Bloomberg survey.
``Seems like we have some profit-taking coming into the market and people are waiting for the inventory data,'' said Tetsu Emori, a fund manager with Astmax Ltd. in Tokyo. ``Currently the refineries are shifting to produce more gasoline rather than heating oil as the weather warms up.''
Crude oil for March delivery dropped as much as 90 cents, or 0.9 percent, to $99.11 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $99.30 at 1:50 p.m. in Singapore.
Yesterday, futures soared $4.51, or 4.7 percent, to settle at $100.01 a barrel on the New York Mercantile Exchange, the biggest one-day gain in two months. Futures reached $100.10, the highest intraday price since trading began in 1983.
The Organization of Petroleum Exporting Countries, set to meet on March 5, may cut output as winter heating demand wanes, oil ministers from Algeria and Iran said in the past week. Oil also rose as a weakening dollar prompted some traders to invest in commodities as a hedge against inflation.
``We're in uncharted territory. OPEC has had a look at what the U.S. dollar has done the past couple of years and they realize they are getting less bang for their buck,'' said Peter McGuire, managing director of Commodity Warrants Australia Ltd. in Sydney. ``There are so many different participants in the market these days that have got plenty of cash and they can make a market move.''
The record was the third time oil has reached $100. Oil rose to a then-record $100.09 a barrel in New York on Jan. 3, a day after touching $100 for the first time on militant attacks in Nigeria, Africa's biggest producer.
March crude-oil futures will expire at the end of trading today. The more active April contract was down 68 cents, at $99.02 a barrel at 2:13 p.m. Singapore time.
The Energy Department report will be released on Feb. 21 at 10:30 a.m. in Washington, a day later than usual because of the President's Day holiday on Feb. 18.
Brent crude for April settlement fell as much as 93 cents, or 0.9 percent, to $97.63 a barrel on London's ICE Futures Europe exchange. The contract traded at $97.81 a barrel at 2:12 p.m. Singapore time.
The contract closed yesterday at a record $98.56 a barrel, up 3.9 percent.
Oil supplies probably gained 2.28 million barrels in the week ended Feb. 15 from 301.1 million barrels, according to the median of response in a Bloomberg survey.
Gasoline inventories probably climbed 500,000 barrels from 229.2 million, according to the responses. Supplies of distillate fuels, a category that includes heating oil and diesel, fell 2 million barrels from 127 million the prior week, according to the survey.
Gasoline and heating oil surged after an explosion yesterday shut Alon USA Energy Inc.'s Big Spring, Texas, refinery. The facility can process 70,000 barrels of crude oil a day. Alon said in a statement that its goal is to resume partial operations in about two months.
``It seems like the refinery problems are getting bigger and bigger every year,'' said Mark Waggoner, president of Excel Futures Inc. in Huntington Beach, California. ``We haven't built a new refinery in
Yes inventories will be up from last week as they have been for the last couple of weeks. Compare the same week of the month back a couple of years. Inventories remain at three year lows. Increases in World demand for all commodities is more than replacing the small decline in American demand.