Oil dropped in New York, sliding to a record discount versus London’s Brent, as rising crude stockpiles in the U.S. countered signs of economic growth in the world’s biggest oil consumer. Futures declined as much as 1.2 percent to trade more than $11 a barrel below Brent. U.S. crude supplies climbed four times more than analysts forecast last week and fuel demand dropped, according to the Energy Department. Abdalla El-Badri, OPEC’s secretary-general of the Organization of Petroleum Exporting Countries said in Davos, Switzerland, yesterday that prices are in a “comfortable zone.” “Bearish fundamentals continue to dominate Nymex oil prices,” said Christopher Bellew, senior broker at Bache Commodities Ltd. in London. “Stock levels at the delivery point in the U.S. Mid-West were already high before the increase reported yesterday. Brent is more reflective of real-world considerations like colder weather and OPEC’s readiness to make enough oil available.” Crude for March delivery on the New York Mercantile Exchange fell as much as $1.03 to $86.30 a barrel in electronic trading. It was at $86.56 at 10:42 a.m. in London. Brent crude for March settlement on the London-based ICE Futures Europe exchange was at $97.78 a barrel, down 13 cents. Yesterday, it surged 2.8 percent, the most since Dec. 1. Brent Premium Brent’s premium over Nymex-traded West Texas Intermediate widened to a record $11.27 a barrel. Oil investors are buying Brent contracts, driving the European benchmark to a record premium above West Texas Intermediate, as a build-up of Canadian supplies at the U.S. oil hub in Cushing, Oklahoma, skew the U.S. crude’s reliability as an indicator of demand. Inventories at Cushing, the main delivery point for New York futures, gained 2.3 percent in the week ended Jan. 21 to the highest since August, according to an Energy Department report yesterday. Total U.S. stockpiles increased 4.84 million barrels to 340.6 million, the data showed. Supplies were forecast to rise 1.2 million barrels, based on the median estimate of 15 analysts surveyed by Bloomberg News. Total demand decreased 1.6 percent to 18.9 million barrels a day, the lowest since November. Prices rallied the most in two weeks yesterday after U.S. new home sales increased more than expected. A Commerce Department report today will probably say durable-goods orders rose, according to economists’ estimates. Strong U.S. Data Stronger-than-expected U.S. economic data has stoked speculation fuel consumption may recover. Sales of new homes climbed to a 329,000 annual pace last month, the Commerce Department said yesterday. Economists polled by Bloomberg News predicted a median 300,000 gain. “The new-home sales data came off a pretty low base but it was definitely positive and when you look at the Fed commentary, one of the areas that they singled out as being disappointing was the housing sector,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. Orders for durable goods advanced 1.5 percent last month, after a 0.3 percent decline in November, based on the median economist forecast before a Commerce Department report today. Pending home sales, or contract signings for existing homes, added 0.9 percent, economists estimated before data scheduled to be released by the National Association of Realtors today. “We are at a bit of a plateau now as far as price is concerned,” said Victor Shum, Singapore-based senior principal at Purvin & Gertz Inc., a consultant. “This is where the market feels the price should be given the balance between the economic optimism and the relatively weak fundamentals.” To contact the reporters on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net; Grant Smith in London at gsmith52@bloomberg.net To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net

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