Oil declines to near $76 a barrel
Wednesday, 12 May 2010
LONDON, May 11 (Bloomberg): Crude oil fell to near $76 a barrel on concern that Europe's bailout of almost $1 trillion may not be sufficient to end the region's sovereign debt crisis.
Oil reversed an increase of as much as 0.8 per cent after the euro dropped against the dollar and investors questioned whether the European plan will reduce deficits accumulated by Greece, Spain and Portugal. US crude supplies probably rose for the 14th time in 15 weeks, reinforcing concern that demand in the world's biggest consumer is lagging.
"Greece and other macro aspects are dominating the market, leading to higher risk aversion," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "For the time being we'll stay below $80, but with US product demand improving we should go back above it within two months."
Crude oil for June delivery fell as much as 70 cents, or 0.9 per cent, to $76.10 a barrel in electronic trading on the New York Mercantile Exchange, and was at $75.99 as of 9:22 a.m. London time. Brent crude oil for June settlement was at $79.35 on the London-based ICE Futures Europe exchange.
Leaders of the 16 European nations using the single currency agreed yesterday to lend as much as 750 billion euros ($957 billion) to the most-indebted member countries.
The euro declined to $1.2729 as of 9:21 a.m. in London from $1.2787 in New York yesterday, when it reached $1.3094, the highest level since May 4.
"The package will just buy Europe some time," said Clarence Chu, a trader at options dealers Hudson Capital Energy in Singapore. "Portugal and Spain now have a safety net so there is less incentive for them to cut their budget deficits."
US crude oil stockpiles probably increased 1.1 million barrels in the week to May 7 from 360.6 million the week before, according to the median of 11 analyst estimates before an Energy Department report this week.
Gasoline supplies probably rose 800,000 barrels from 224.9 million the prior week. Stockpiles of distillate fuel, which includes heating oil and diesel, climbed 1.3 million barrels from 152.4 million the prior week, according to the survey.
The industry-funded American Petroleum Institute will release its own weekly data at 4:30 p.m. in Washington D.C. today. Oil-supply totals from the API and DOE moved in the same direction 75 per cent of the time over the past four years, according to data compiled by Bloomberg.
Oil reversed an increase of as much as 0.8 per cent after the euro dropped against the dollar and investors questioned whether the European plan will reduce deficits accumulated by Greece, Spain and Portugal. US crude supplies probably rose for the 14th time in 15 weeks, reinforcing concern that demand in the world's biggest consumer is lagging.
"Greece and other macro aspects are dominating the market, leading to higher risk aversion," said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. "For the time being we'll stay below $80, but with US product demand improving we should go back above it within two months."
Crude oil for June delivery fell as much as 70 cents, or 0.9 per cent, to $76.10 a barrel in electronic trading on the New York Mercantile Exchange, and was at $75.99 as of 9:22 a.m. London time. Brent crude oil for June settlement was at $79.35 on the London-based ICE Futures Europe exchange.
Leaders of the 16 European nations using the single currency agreed yesterday to lend as much as 750 billion euros ($957 billion) to the most-indebted member countries.
The euro declined to $1.2729 as of 9:21 a.m. in London from $1.2787 in New York yesterday, when it reached $1.3094, the highest level since May 4.
"The package will just buy Europe some time," said Clarence Chu, a trader at options dealers Hudson Capital Energy in Singapore. "Portugal and Spain now have a safety net so there is less incentive for them to cut their budget deficits."
US crude oil stockpiles probably increased 1.1 million barrels in the week to May 7 from 360.6 million the week before, according to the median of 11 analyst estimates before an Energy Department report this week.
Gasoline supplies probably rose 800,000 barrels from 224.9 million the prior week. Stockpiles of distillate fuel, which includes heating oil and diesel, climbed 1.3 million barrels from 152.4 million the prior week, according to the survey.
The industry-funded American Petroleum Institute will release its own weekly data at 4:30 p.m. in Washington D.C. today. Oil-supply totals from the API and DOE moved in the same direction 75 per cent of the time over the past four years, according to data compiled by Bloomberg.