Oil declined for the first time in three days as the dollar strengthened and a government report showed fuel demand dropped and crude supplies rose in the US, the world’s biggest energy consumer.
Oil pared yesterday’s gains as the dollar rose against the euro, limiting investors’ need for assets, such as commodities, to hedge against inflation. Crude inventories rose 1.01 million barrels, increasing for a seventh week, according to an Energy Department report. Total fuel demand dropped by 4.2 per cent to 18.8 million barrels a day, the biggest one-week decline since the week ended November 6.
''We are still seeing oversupply in the western economies,'' Toby Hassall, a research analyst at CWA Global Markets in Sydney. ''US fuel demand is looking slightly better than a year ago, but it’s far from being a tight market.''
Crude oil for April delivery dropped as much as 38 cents, or 0.5 per cent, to $US82.55 a barrel in electronic trading on the New York Mercantile Exchange. It was at $US82.56. Yesterday, the contract gained $US1.23, or 1.5 per cent, to settle at $US82.93, the highest close since January 6.
The dollar traded at $US1.3719 per euro, up 0.14 per cent, from $US1.3738 yesterday.
The Organization of Petroleum Exporting Countries, supplier of about 40 per cent of the world’s oil, agreed to keep its production limits unchanged for a fifth meeting. It cut quotas by a record 4.2 million barrels a day in late 2008 when global demand collapsed because of the recession.
Fuel stockpiles
Distillate stocks, which include heating oil and diesel, decreased 1.49 million barrels to 148.1 million. Stockpiles were estimated to drop by 1.35 million barrels, according to the median of 18 analyst estimates in a Bloomberg News survey.
Gasoline stockpiles fell 1.71 million barrels to 227.3 million in the week ended March 12. Supplies were forecast to fall 1.25 million barrels. Crude inventories were estimated to increase by 1.15 million barrels.
Oil imports fell by 64,000 barrels a day last week to 8.43 million, the Energy Department said. Refinery utilisation declined 0.2 per centage point to 80.6 per cent. It was 82.1 per cent a year earlier.
OPEC delivered 47 per cent of its crude and refined products to the Asia Pacific region in 2008, up from 45 per cent the year before, according to data on its web site. That compares with a drop in the U.S. to 22 per cent in 2008 from 26 per cent in 2007.
Brent crude for May settlement advanced $US1.43, or 1.8 per cent, to close at $US81.96 a barrel on the ICE Futures Europe exchange in London yesterday.
