Oil Falls for a Second Day on Forecast Stockpiles Gained

Wednesday, 05 August 2009

Oil fell for a second day before a government report that’s forecast to show U.S. crude inventories increased. An Energy Department report today will probably show crude stockpiles gained 600,000 barrels, analysts surveyed by Bloomberg said, compared with the 1.52 million-barrel decline posted by the industry-funded American Petroleum Institute yesterday. API data have moved in step with official figures 76 percent of the time in the past four years, Bloomberg data show.

“The economy is only bottoming out and the recovery to pre-recession activity levels will take time,” said Harry Tchilinguirian, senior oil market analyst at BNP Paribas SA in London. “With more inventory builds, prices could stand to correct from recent gains.”

Crude oil for September delivery fell as much as 57 cents, or 0.8 percent, to $70.85 a barrel in electronic trading on the New York Mercantile Exchange, trading for $70.89 as of 9:43 a.m. London time.

Yesterday, oil dropped 16 cents, or 0.2 percent, to settle at $71.42 a barrel. Oil has fallen 0.4 percent from its close on Aug. 3, when it reached $71.58 a barrel, the highest settlement since June 12.

Brent crude oil for September settlement was at $73.97 a barrel on London’s ICE Futures Europe Exchange at 9:44 a.m. in London. The contract is trading about $3 above its equivalent in New York.

The Energy Department is scheduled to release its report on crude stockpiles for the week ended July 31 at 10:30 a.m. in Washington.

U.S. gasoline inventories increased 2.1 million barrels to 215.7 million in the week ended July 31, the API report showed. The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines.

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