Crude oil dropped for the first time in three days as the dollar climbed against the euro and an industry report showed an increase in distillate supplies in the US, the world’s biggest energy consumer.
Oil retreated from a four-week high after the American Petroleum Institute reported that supplies of distillate fuel, a category that includes heating oil and diesel, rose 1.28 million barrels last week. A US Energy Department report on Thursday is forecast to show stockpiles dropped, according to a Bloomberg News survey.
“The global economy is still realistically weak,” said Peter McGuire, managing director at CWA Global Markets Pty. in Sydney. “I don’t see a lot of issues in terms of supply constraints out there and demand is relatively weak.”
Crude oil for March delivery dropped as much as 46 cents, or 0.6 percent, to $76.87 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $77.06 at 9:14 a.m. Singapore time. Wednesday, the contract rose 32 cents to $77.33 a barrel, the highest settlement since January 20.
The euro traded near a nine-month low against the dollar after a political ally of Germany’s Chancellor Angela Merkel said “not a single euro” should go to Greece. The US currency traded at $1.3568 at 11:41 a.m. in Sydney, from $1.3607 on Wednesday. A stronger dollar curbs demand for commodities as alternative investments.
Oil is “going to be very much range-bound between $72 and $78 at the moment,” CWA Global’s McGuire said.
The API reported yesterday that crude inventories fell 63,000 barrels last week. A US Energy Department report is forecast to show that supplies of crude oil rose 1.73 million barrels, according to 18 analysts’ responses in a Bloomberg News survey.
The API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the energy department for its weekly survey.
The energy department is scheduled to release its weekly inventory report at 11 a.m. today in Washington, a day later than usual because of Presidents’ Day holiday on February 15.
Inventories of distillate fuel probably fell 1.5 million barrels from 156.2 million the prior week, a Bloomberg News survey showed. Gasoline supplies probably climbed 1.5 million barrels from 230.4 million.
Crude oil rose Wednesday as US equities advanced on higher-than-estimated earnings and a Federal Reserve report that showed output at factories, mines and utilities increased in January.
US manufacturing gained 1 percent as factories produced more consumer goods and business equipment, according to the Federal Reserve.
Work began on 591,000 houses at an annual rate last month, up 2.8 percent from December, figures from the commerce department showed in Washington. Starts were projected to increase to a 580,000 pace, according to the median estimate of 77 economists surveyed by Bloomberg News.
Brent crude for April delivery declined as much as 42 cents, or 0.6 percent, to $75.85 a barrel on the London-based ICE Futures Europe exchange, and traded at $76.03 at 9:18 a.m.
Singapore time. Prices rose 59 cents, or 0.8 percent, to end the session at $76.27 on Wednesday.
