Stockpiles increased 3.2 million barrels last week, according to a Bloomberg News survey of analysts. A government report today showed that U.S. builders broke ground in January on the fewest houses on record, a sign that the recession in the world’s biggest energy-consuming country will deepen.
Crude oil for March delivery fell 39 cents, or 1.1 percent, to $34.54 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Prices are down 22 percent this year. The more-active April contract dropped $1.14, or 3 percent, to $37.40 a barrel. March trading ends on Feb. 20.
Brent crude oil for April settlement declined $1.40, or 3.4 percent, to $39.63 a barrel on London’s ICE Futures Europe exchange. Futures touched $39.44, the lowest since Dec. 31.
Housing starts plunged 17 percent last month to an annual rate of 466,000, lower than projected, according to figures from the Commerce Department today in Washington. A report from the Federal Reserve showed industrial output sank in January for the sixth time in seven months.
Prices for delivery in future months are higher than for earlier ones, a situation known as contango, allowing buyers to profit from hoarding oil. This has led to record stockpiles at Cushing, Oklahoma, where New York-traded West Texas Intermediate crude is delivered.
Futures touched $32.40 on Dec. 19, the lowest since February 2004, after a report showed that Cushing stockpiles climbed 21 percent the week ended Dec. 12.
Gasoline supplies probably declined 500,000 barrels in the week ended Feb. 13, according to the median of 16 responses in the Bloomberg News survey. Stockpiles of distillate fuel, a category that includes heating oil and diesel, dropped 1.5 million barrels, the survey showed.
The Energy Department is scheduled to release its weekly report tomorrow at 11 a.m. in Washington, a day later than usual because of the Presidents Day holiday.
Gasoline futures for March delivery fell 4.21 cents, or 3.8 percent, to $1.0697 a gallon in New York. Futures touched $1.054, the lowest since Jan. 23.
The average U.S. pump price for regular gasoline dropped 0.3 cent to $1.957 a gallon, AAA, the nation’s largest motorist organization, said on its Web site today. Prices have declined 52 percent from the record $4.114 a gallon reached on July 17.
Heating oil for March delivery declined 4.04 cents, or 3.4 percent, to $1.146. The contract touched $1.1399, the lowest since September 2004.
U.S. fuel consumption dropped 3.1 percent to an average 19.5 million barrels in January, the lowest for the month in seven years, according to a report today from the industry-funded American Petroleum Institute.
The Organization of Petroleum Exporting Countries cut oil production 3.5 percent in January, according to a Bloomberg News survey. Producers with output quotas, all members except Iraq, pumped 26.2 million barrels a day, 1.355 million more than their target of 24.845 million barrels a day.