Oil falls back from $100
Traders work on the floor of the crude oil futures pit at the New York Mercantile Exchange. Bloomberg News |
Crude oil fell from a record $100.10 a barrel in New York on speculation that a US Energy Department report will show stockpiles rose for a sixth week.
Oil prices declined as traders sold contracts to lock in profits from Tuesday's 4.7 percent gain. Crude 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.
"The factors that led us to believe that prices are going to come down are still there," Lehman Brothers Holdings Inc's chief energy economist Edward Morse said. "We're in the refinery maintenance season, crude oil inventories have been building not just in the US but Europe."
Crude oil for March delivery dropped as much as $1.16, or 1.2 percent, to $98.85 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $99.04 at 10:15 am in London.
On Tuesday, futures soared $4.51 to settle at $100.01 a barrel on the New York Mercantile Exchange, the first time oil closed over $100 and the biggest one-day gain in two months. Futures reached $100.10, the highest intraday price since trading began in 1983.
"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."
Brent crude
Brent crude for April settlement fell as much as $1.36, or 1.4 percent, to $97.20 a barrel on London's ICE Futures Europe exchange. The contract traded at $97.35 a barrel at 10:14 am London time.
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.
"One of the factors driving the oil price is whether OPEC nations will decrease production on weaker demand in the second quarter," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. "We can't see that happening with prices at $95 to $100 per barrel."
Oil also rose as a weakening dollar prompted some traders to invest in commodities as a hedge against inflation.
Oil has gained 15 percent since its intraday low of $86.24 a barrel on Feb 7. That was the lowest crude reached this year, prompting officials from OPEC member countries to consider output cuts to defend the $80 price level.
Nigeria attacks
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. Prices are now above the inflation-adjusted high of $84.73 reached in 1981.
March crude-oil futures expired at the end of trading in New York yesterday. The more active April contract was down $1.05 at $98.96 a barrel at 10:08 am London time.
The Energy Department report will be released today at 10:30 am in Washington, a day later than usual because of the President's Day holiday on Feb 18.
Crude 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.
Agencies
(China Daily 02/21/2008 page16)