Inventories climbed 1.9 percent to 338.8 million barrels last week, the highest since August 2007, an Energy Department report showed yesterday. Orders for U.S. durable goods fell in December for a fifth consecutive month and the number of Americans receiving unemployment benefits soared to a record, figures from the Labor and Commerce Departments showed.
Crude oil for March delivery fell 72 cents, or 1.7 percent, to settle at $41.44 a barrel at 2:44 p.m. on the New York Mercantile Exchange. Prices are down 7.1 percent this year and are 55 percent lower than a year ago.
Prices rose from the day’s lows after the United Steelworkers union said it plans to reject the third contract offer from Royal Dutch Shell Plc covering workers at refineries with almost two-thirds of the country’s capacity. The current agreement expires Feb. 1.
BP Plc, Europe’s second-largest oil company, said yesterday it may shut four U.S. refineries with union workers that can process 1.3 million barrels a day of crude oil if the steelworkers’ union goes on strike. Exxon Mobil Corp. and Shell are preparing to keep their U.S. plants running if there is a work stoppage.
Gasoline futures for February delivery rose 4.74 cents, or 4 percent, to $1.2309 a gallon in New York, the highest settlement since Nov. 14. Heating oil for February increased 0.68 cent, or 0.5 percent, to settle at $1.4283 a gallon.
Federal Reserve officials warned of a prolonged global economic slowdown that may push the U.S. to the brink of deflation. For the first time during the credit crisis, the Federal Open Market Committee’s statement yesterday indicated concern about the worldwide economy weakening significantly,” with some risk” that inflation would remain below ideal rates.
U.S. gross domestic product will contract 1.6 percent, Japan’s will shrink 2.6 percent and the euro area will decline 2 percent in 2009, the International Monetary Fund said yesterday.
Brent crude oil for March settlement rose 50 cents, or 1.1 percent, to end the session at $45.40 a barrel on London’s ICE Futures Europe exchange.