follow up post: <<Crude Oil Futures Plunge After Failing to Breach $60 a Barrel (edit: closed at 57.73--max)
By Mark Shenk
Feb. 7 (Bloomberg) -- Crude oil fell after failing to break above $60 a barrel in New York for a third-straight day and a government report showed that U.S. fuel stockpiles are ample.
The market opened higher each day this week before slipping later in the session. Oil prices have jumped 15 percent in New York in the past three weeks as cold weather moved across the U.S., spurring heating-oil demand. Heating oil, diesel, crude oil and gasoline inventories last week were above the five-year average for the period, the Energy Department said today.
``There have been three attempts to break through $60, which have failed and are a sign to sell,'' said Bill O'Grady, director of fundamental futures research at A.G. Edwards & Sons in St. Louis. ``We've had a good run higher and now it's time for a bit of a correction. The only question is how far prices will go down.''
Crude oil for March delivery fell 84 cents, or 1.4 percent, to $58.04 a barrel at 1:40 p.m. on the New York Mercantile Exchange. Prices are 8 percent lower than a year ago.
``There is major resistance at $60,'' said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. ``We won't breach it unless we see a major change in the supply-demand fundamentals or the geopolitical situation worsens in a place like Iran.''
Fuel Stockpiles
U.S. gasoline inventories jumped 2.6 million barrels to 227.2 million last week, an Energy Department report showed today. It was the eighth-straight weekly gain, leaving stockpiles 4.5 percent above the five-year average, the department said. A gain of 1.63 million barrels was expected, according to the median of 14 responses in a Bloomberg survey prior to the report.
Supplies of distillate fuel, a category that includes heating oil and diesel, slipped 3.63 million barrels to 136.3 million, the report showed. A 3 million barrel drop was expected, according to the survey.
``There was a big decline in distillate supplies but there won't be that many more because we are in an advanced stage of the heating season,'' said James Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois. ``The size of the gain in gasoline also caught people by surprise.''
Brent crude oil for March settlement fell $1.05, or 1.8 percent, to $57.37 a barrel on the London-based ICE Futures exchange.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net .
Last Updated: February 7, 2007 13:53 EST |
