Feb. 18 (Bloomberg) -- Crude oil traded below $35 a barrel in New York on speculation that U.S. stockpiles climbed for the 19th time in 21 weeks amid a drop in demand because of the global economic contraction.An Energy Department report tomorrow will probably show U.S. crude-oil inventories rose 3.2 million barrels last week, according to the median of 11 analyst responses in a Bloomberg News survey. The Reuters/Jefferies CRB Index of 19 commodities prices fell yesterday to 203.25, the lowest since June 21, 2002, and has slipped 11 percent this year.
Crude oil for March delivery was at $34.96 a barrel, up 3 cents, in electronic trading at 9:31 a.m. Singapore time on the New York Mercantile Exchange. In New York yesterday, futures fell $2.58, or 6.9 percent, to settle at $34.93 a barrel, the biggest decline since Jan. 27. Prices are down 22 percent this year.
The March contract expires on Feb. 20. The more active April contract was at $38.38 a barrel, down 16 cents, at 9:33 a.m. Singapore time.
Manufacturing in New York declined in February at the fastest pace on record, and JapanÂ’s economy shrank in the fourth quarter at an annualized rate of 12.7 percent, the most severe contraction since 1974, government reports showed over the past two days.
Prices for oil to be delivered in future months are higher than for earlier ones, a situation known as contango, allowing buyers to profit from hoarding oil. The price of oil for delivery in April is $3.61 a barrel higher than for March. December futures are up $13.87 from the front month.
The build in supplies at Cushing, Oklahoma, where West Texas Intermediate, the U.S. benchmark grade, is stored, has contributed to the contango. Inventories there climbed 1.7 percent to 34.9 million barrels last week, the Energy Department said on Feb. 11. It was the highest since at least April 2004, when the department began keeping records for the location.
Gasoline stockpiles probably declined 300,000 barrels in the week ended Feb. 13, the survey showed. Supplies of distillate fuel, a category that includes heating oil and diesel, probably dropped 1.5 million barrels. Gasoline futures for March delivery were at $1.11 a gallon, down 18 cents, at 9:10 a.m. Singapore time. The contract yesterday fell 9.45 cents, or 7.8 percent, to $1.1118 a gallon yesterday in New York, the lowest settlement since Jan. 27
Brent crude oil for April settlement was at $40.55 a barrel, up 20 cents, at 9:22 a.m. Singapore time on LondonÂ’s ICE Futures Europe exchange. It declined yesterday $2.25, or 5.2 percent, to end the session at $41.03 a barrel, the lowest since Dec. 30.
| Brent crude is a better marker than West Texas, according to recent reports, since the latter can't be pumped to all the refineries in our country. |