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Oil Drops From One-Month High Amid Speculation U.S. Supply Rose

Published: November 20, 2012 | 8:29 am
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Oil slid from the highest level in a month in New York on signs gains were excessive amid speculation stockpiles rose for a third week in the U.S.

Futures dropped as much as 0.7 percent after surging 2.7 percent yesterday. Crude inventories in the U.S., the world’s biggest oil user, probably increased by 1 million barrels last week, a Bloomberg News survey showed before an Energy Department report tomorrow. Futures also retreated after reaching technical resistance along the 50-day moving average, around $89.80 a barrel today, according to data compiled by Bloomberg.

Crude for January delivery fell as much as 66 cents to $88.62 a barrel in electronic trading on the New York Mercantile Exchange. It was at $88.70 at 4:02 p.m. Singapore time. The contract surged to $89.28 yesterday, the highest close since Oct. 19. Prices have declined 10 percent this year.

Brent oil for January settlement on the London-based ICE Futures Europe exchange was down as much as 54 cents, or 0.5 percent, at $111.16 a barrel. The European benchmark crude was at a premium of $22.52 to New York-traded West Texas Intermediate grade, from $22.42 yesterday.

U.S. crude stockpiles climbed to 375.9 million barrels in the week ended Nov. 9, the Energy Department said in a report on Nov. 15. That was the highest since July 20.

Crude output rose 32,000 barrels a day to 6.71 million in the week to Nov. 9, the fastest rate since May 1994, the department’s report showed. Production was up for 10 weeks, the longest string of gains since 2008. Inventories also may have increased as Phillips 66’s 238,000 barrel-a-day Bayway refinery in New Jersey remained shut after Hurricane Sandy, which hit the East Coast on Oct. 29.

Gasoline supplies probably climbed 1 million barrels last week, according to the median estimate of seven analysts surveyed by Bloomberg News before tomorrow’s report. Distillate- fuel inventories, including heating oil and diesel, are expected to have dropped 1 million barrels.

The industry-funded American Petroleum Institute in Washington will publish its own stockpile data today.


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