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Oil prices drop on fuel supplies report

23 September 2009 07:40 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. Crude oil fell in New York after an industry report showed an increase in fuel supplies in the U.S., adding to signs demand has yet to recover in the worldâ€™s largest energy consumer, Bloomberg reported.
Oil pared yesterdayâ€™s 2.6 percent gain after a report from the industry-funded American Petroleum Institute showed U.S. gasoline stockpiles climbed the most since January. The Energy Department report today is expected to show increases in the nationâ€™s fuel inventories, according to a Bloomberg News survey.
Crude oil for November delivery declined as much as 63 cents, or 0.9 percent, to $71.13 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.61 at 1 p.m. in Singapore. The contract for October expired yesterday, settling at $71.55 a barrel, up $1.84.
Futures have gained 60 percent this year on speculation global fuel usage may recover as economies emerged from recession. Supplies held by the largest consumer nations have increased at the same time, fanning concern demand remains slow.
The Energy Department is expected to report a 1.45 million- barrel increase in U.S. distillate fuel inventories in the week to Sept. 18, according to the median of estimates in a Bloomberg survey. Stockpiles, which include heating oil and diesel, were previously at 167.8 million barrels, the highest since January 1983.
The dollar extended its losses, bolstering the investment appeal of commodities including oil and gold, amid speculation the Federal Reserve will keep interest rates low.
The dollar traded at $1.4809 per euro as of 1:15 p.m. in Tokyo from $1.4790 in New York yesterday, after earlier declining to $1.4842, the lowest level since Sept. 22, 2008.
Brent crude oil for November settlement dropped as much as 63 cents, or 0.9 percent, to $69.90 a barrel on the London-based ICE Futures Europe exchange. The contract traded at $70.41 at 1 p.m. Singapore time.