Oil Falls First Time in 4 Days

Oil dropped for the first time in four days in New York on forecasts the economy will worsen, curtailing demand in the world’s biggest energy-consuming country.
TradingEconomics.com, Bloomberg 1/6/2009 1:32:50 PM

Oil fell from a five-week high after the Federal Reserve released minutes of a meeting of policy makers last month that showed they believed downside risks to the economy would be substantial.” Futures also declined on speculation that supplies rose last week.

Oil for February delivery fell 21 cents, or 0.4 percent, to $48.60 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Earlier, it touched $50.47, the highest since Dec. 1.

U.S. stockpiles probably rose 1 million barrels in the week ended Jan. 2, from 318.7 million the week before, according to the median forecast of seven analysts surveyed by Bloomberg. Oil topped $50 earlier amid OPEC supply cuts and conflicts between Russia and Ukraine and in the Middle East.

Oil rose 38 percent from Dec. 24 to yesterday, and traders who bought when oil was cheaper may be selling to collect their profits, triggering sell orders, said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago.

Stockpiles at Cushing, Oklahoma, the delivery point for New York futures, last week were 541,000 barrels below a record 28.7 million barrels set the week of Dec. 19.

The U.S. Energy Department is scheduled to release its weekly report on inventories of crude oil and fuels at 10:30 a.m. tomorrow in Washington.

Brent crude oil for February settlement added $1.25, or 2.5 percent, to $50.87 a barrel on London’s ICE Futures Europe exchange. Earlier, it touched $52.21, the highest since Dec. 1.