Oil dropped as much as 2.3 percent after Treasury Secretary Timothy Geithner said he is exploring a range of different structures” to bail out lenders. Stockpiles probably increased 2.5 million barrels last week, according to the median of 13 analyst estimates in a Bloomberg News survey.
Crude oil for March delivery fell $1.90, or 4.8 percent, to $37.66 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Oil touched $37.35, the lowest since Jan. 20. Prices gained as much as $2.24, or 5.7 percent, before Geithner spoke. Oil is down 16 percent this year and has declined 60 percent from a year ago.
Geithner pledged government financing for programs aimed at spurring new lending and addressing banks’ toxic assets, an effort that may grow to as much as $2 trillion.
The price of oil for delivery in April is $6.13 a barrel higher than the March contract. December futures are up $16.07 from the front month. This structure, in which the future month’s price is higher than the one before it, is known as contango, and is often an indicator of oversupply.
Gasoline stockpiles rose 500,000 barrels from 220.2 million in the week ended Feb. 6, according to the Bloomberg News survey. The Energy Department is scheduled to release its weekly inventory report tomorrow at 10:30 a.m. in Washington.
Gasoline futures for March delivery declined 0.09 cent to $1.2462 a gallon in New York. Heating oil rose 4.53 cents, or 3.4 percent, to $1.307.
The Organization of Petroleum Exporting Countries has complied with about 80 percent of the 4.2 million barrels a day of production cuts it announced and has 900,000 barrels left to go, Secretary-General Abdalla el-Badri told reporters in London yesterday. That’s left the group with about 8 million barrels of shut-in capacity.
Kuwait will monitor oil market conditions before deciding whether to support an OPEC supply cut when ministers meet in Vienna on March 15, newly appointed Oil Minister Sheikh Ahmed al- Abdullah al-Sabah told reporters in parliament today.
Global oil demand will average 84.7 million barrels a day this year, down 1.17 million barrels from 2008, the U.S. Energy Department said in a report today.
Recessions in the world’s largest economies will last for years, dragging down crude-oil demand and prices, BP Plc Chief Executive Officer Tony Hayward said today. China and India will lead the recovery in energy consumption, Hayward said in a presentation at a Houston energy conference sponsored by Cambridge Energy Research Associates.
Brent crude oil for March settlement fell $1.37, or 3 percent, to $44.65 a barrel on London’s ICE Futures Europe exchange. Brent futures traded at a $6.99 premium to West Texas Intermediate, the grade that’s traded in New York.