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Oil prices drop for a second day

24 September 2009 08:30 (UTC +04:00)

Baku. Vahab Rzayev â€“ APA-Economics. Crude oil declined for a second day in New York after a U.S. government report showed a larger-than- expected increase in fuel stockpiles in the worldâ€™s largest energy-consuming nation, Bloomberg reported.
Gasoline stockpiles in the U.S. surged 5.4 million barrels last week, the Energy Department said. Thatâ€™s more than the 500,000-barrel increase forecast in a Bloomberg survey of analysts. Diesel and heating oil inventories jumped 2.9 million barrels when 1.45 million was expected. Crude supplies climbed 2.86 million barrels last week.
Crude oil for November delivery fell as much as 87 cents, or 1.3 percent, to $68.10 a barrel on the New York Mercantile Exchange. It was at $68.31 at 12:51 p.m. Singapore time. Yesterday, the contract dropped $2.79, or 3.9 percent, to settle at $68.97. Prices have gained 53 percent since January.
Oil also dropped after the dollar rose against the euro, reducing the attractiveness of commodities as a hedge against inflation. The dollar traded at $1.4735 per euro at 12:52 p.m. in Singapore, unchanged from yesterday. U.S. equities fell amid concern the Federal Reserve is nearing the end of its efforts to lift the economy out of recession.
Crude oil inventories rose to 335.6 million barrels, the biggest increase since the week ended July 24, the Energy Department report showed. Analysts had expected a 1.4 million- barrel drop. The gain left stockpiles 9.1 percent above the five-year average. Imports climbed 10 percent to 9.79 million barrels a day, the highest since July.
Brent crude for November settlement dropped as much as 60 cents, or 0.9 percent, to $67.39 a barrel on the London-based ICE Futures Europe exchange. It was at $67.40 at 12:47 p.m. Singapore time. Yesterday, the contract fell $2.54, or 3.6 percent, to end the session at $67.99 a barrel.
Refineries operated at 85.6 percent of capacity last week, down 1.4 percentage points from the previous week, the Energy Department said. U.S. refiners often idle units for maintenance in September and October as gasoline demand drops and before heating-oil use increases.
U.S. fuel consumption dropped 3.3 percent to 18.5 million barrels a day, the lowest since the week ended June 26. Gasoline use slipped 2.3 percent to 8.79 million barrels a day, the lowest since January.
The Group of 20 nations will meet in Pittsburgh today to discuss how they will deal with the weakest recovery since World War II. They are attempting to pay off the $9 trillion tab they ran up rescuing the world economy from the deepest financial slump in seven decades.
The G-20 may warn that the recovery is still too weak to start reversing lifelines to banks and the broader economy.