Business | Oil & Gas
Oil retreats from record after US inventories rise unexpectedly
Oil fell from near a record high yesterday after a US government report showed fuel inventories in the world's largest consumer rose much more than expected.
- Reuters
- Published: 00:48 March 13, 2008
London: Oil fell from near a record high yesterday after a US government report showed fuel inventories in the world's largest consumer rose much more than expected.
US crude stocks rose by 6.2 million barrels last week, the Energy Information Administration report showed, more than the 1.7 million-barrel boost expected by analysts. Gasoline stockpiles rose to a 15-year high.
"It is a ridiculously bearish report," said Stephen Schork, editor of The Schork Report, a newsletter. "The main thing is the gasoline build."
"We have major concerns regarding the economy in the US, rising supply, falling demand, why is crude oil trading at over $100 per barrel; it makes no fundamental sense."
US crude was down 90 cents at $107.85 a barrel by 1501 GMT, off the record high of $109.72. London Brent was down 40 cents to $104.85, off an all-time high of $105.82.
Stocks of distillates in the US fell by 1.2 million barrels, according to the EIA report, less than the 1.9 million-barrel decline expected. Gasoline inventories have risen for 18 consecutive weeks. "You can't swing a cat without hitting a gallon of gasoline in this country," Schork said.
Traders said the recent jump in prices could leave the market vulnerable to a pullback. The relative strength index of US crude has risen above 70 this week, known as overbought and an indication prices could retreat.
Limiting oil's decline, the dollar sank to a record low against the euro.
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