By Grant Smith and Yee Kai Pin March 2 (Bloomberg) -- Oil traded little changed below $79 a barrel after yesterday falling in New York, as analysts forecast U.S. crude supplies increased for a fifth week. U.S. crude inventories probably rose 1.5 million barrels last week from 337.5 million, according to a Bloomberg News survey before an Energy Department report tomorrow. Oil fell yesterday as the dollar advanced against the euro. Demand for OPEC crude may drop this year on high stockpiles and a weak economy, the United Arab Emirates oil minister said today. “The market is still well-supplied, perhaps even over- supplied,” said Gerrit Zambo, a trader at Bayerische Landesbank in Munich. “Eighty dollars a barrel is too much for the moment. But fundamentals are of secondary importance. The direction is coming from equity markets and economic data.” Crude oil for April delivery was at $78.51 a barrel, down 19 cents, in electronic trading on the New York Mercantile Exchange at 9:52 a.m. London time. Yesterday, the contract fell 96 cents to $78.70. Futures have lost 1 percent this year. Brent crude for April declined 11 cents to $76.78 a barrel on London’s ICE Futures Europe exchange. Demand for crude produced by the Organization of Petroleum Exporting Countries could drop by 100,000 barrels a day this year as stockpiles are higher than the five-year average and the global economy is weak, U.A.E. Oil Minister Mohamed Al-Hamli said in Abu Dhabi today. Commercially held U.S. crude stockpiles have risen to 5.1 percent above the five-year average level, even as refiners raised processing runs, Energy Department data showed. Imports increased 6.3 percent to 9.08 million barrels a day in the week ended Feb. 19, the highest level since October. Fuel Stockpiles The Energy Department will release its Weekly Petroleum Status Report at 10:30 a.m. tomorrow in Washington. Refineries operated at 81.2 percent of capacity last week, unchanged from the previous week, according to the median of responses in Bloomberg’s survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, probably fell 500,000 barrels from 152.7 million the prior week, according to the survey. Six of the respondents forecast a decline, one predicted an increase and one said there was no change. Analysts were split over whether gasoline supplies increased or declined. Inventories probably rose 50,000 barrels from 231.2 million, the survey showed. Four of the analysts anticipated an increase, two predicted a decline and two said inventories were unchanged. API Report The industry-funded American Petroleum Institute will release its own inventory report later today. The API collects stockpile data on a voluntary basis from operators of refineries, bulk terminals and pipelines. “In terms of the oil market’s internal supply and demand fundamentals, the picture remains fairly soft,” said Toby Hassall, a research analyst at CWA Global Markets Pty in Sydney. “There’s ongoing speculation that we’re going to need some firmer physical fundamental data to push oil higher.” The dollar strengthened for a second day against the euro, damping the investment appeal of commodities, including gold. The U.S. currency traded at $1.3490 against the euro at 9:52 a.m. in London, after gaining 0.5 percent to $1.3560 yesterday. “The dollar was firmer overnight and that softened oil prices,” said Hassall at CWA Global Markets. To contact the reporters on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net

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