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Oil falls below $85 ahead of US inventory data - Daily News Egypt

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Oil falls below $85 ahead of US inventory data

LONDON: US crude oil fell more than $1 to below $85 per barrel on Tuesday, retreating from 19-month highs ahead of an expected rise in US crude and fuel stocks and as the dollar strengthened. Data published later on Tuesday is likely to show US crude inventories rose last week as a discount for prompt …


LONDON: US crude oil fell more than $1 to below $85 per barrel on Tuesday, retreating from 19-month highs ahead of an expected rise in US crude and fuel stocks and as the dollar strengthened.

Data published later on Tuesday is likely to show US crude inventories rose last week as a discount for prompt oil widened the contango structure of the futures curve, spurring refiners to import more for storage, a Reuters poll said.

The dollar reached an eight-and-a-half month high against the yen and a one-year peak versus the euro after robust data that suggested the Federal Reserve will lead its counterparts in Europe and Japan in raising interest rates this year.

US crude for June fell $1.40 to $84.79 by 1200 GMT, after hitting an intraday high of $87.15 on Monday, the strongest front-month price since $89.82 traded on Oct. 9, 2008.

Brent crude slipped $1.50 to $87.44, keeping a big premium over US crude futures, also known as WTI.

Dealers said the market sell-off partly reflected a reaction to Monday’s rally, which some thought had been overdone, and worries market fundamentals had become disconnected from prices.

"The market is anticipating reports of much higher crude inventories and the stronger dollar isn’t helping either," said Carsten Fritsch, commodities analyst at Commerzbank.

Despite the price falls, oil prices received some support from worries that the giant slick in the Gulf of Mexico could disrupt crude oil supplies in the United States.

This strength was clear at the back end of the curve where US futures for five years ahead widened their premium over the front-month to around $12 from under $5 a month ago.

BP said on Tuesday work had begun to drill a relief well to stop the spill.
Ahead of weekly inventory data from industry group, the American Petroleum Institute (API), and the US government Energy Information Administration (EIA), analysts forecast crude stocks increased by 1.2 million barrels last week.

If so, US crude stocks — at their highest level since mid-June 2009 — would have risen for the 13th time in 14 weeks, and could, in some way, ease concerns over a possible supply squeeze if the busted well gushing oil is not contained quickly.

Distillate stocks, including heating oil and diesel, were forecast up 1.8 million barrels, for the fifth-straight week of a build, while gasoline was seen rising just 200,000 barrels after a surprise drawdown the week before, the poll showed.

The dollar rose 0.5 percent against a basket of currencies, boosted by data on Monday showing US manufacturing posted its fastest pace of growth in nearly six years in April.
A strong US currency makes dollar-denominated commodities, such as oil, costlier for holders of other currencies.

 

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https://www.dailynewsegypt.com/2010/05/04/oil-falls-below-85-ahead-of-us-inventory-data/
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