Oil declined a fourth day in New York, the longest losing streak in almost eight weeks, as rising U.S. supplies and slowing economic growth stoked speculation fuel demand may weaken in the world’s biggest crude consumer.
Futures dropped as much as 0.7 percent after an Energy Department report yesterday showed stockpiles rose to the highest level since October. Prices also slipped after separate reports showed a lower-than-forecast expansion in service industries and employment. Labor Department data tomorrow may show the U.S. generated fewer jobs in April than in March.
“The data is signaling that the recovery isn’t as rapid as some were expecting,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicted oil will average $113 in the third quarter. “It’s going to be a slow grind back for the U.S.”
Crude for June delivery lost as much as 81 cents to $108.43 a barrel in electronic trading on theNew York Mercantile Exchange. The contract was at $108.63 at 10:48 a.m. Sydney time. Yesterday, it slid $1.81, or 1.6 percent, to $109.24, the lowest since April 19.
Oil is headed for a fourth day of declines, the longest streak of losses since the four days ended March 11. Prices are up 36 percent the past year.
Brent crude for June settlement slipped 57 cents, or 0.5 percent, to $120.62 a barrel, on the London-based ICE Futures Europe exchange. Yesterday, the contract fell $1.26, or 1 percent, to $121.19, the lowest settlement since April 12.
Oil Inventories
U.S. crude inventories rose 3.42 million barrels to 366.5 million last week, the Energy Department report showed. They were forecast to climb 2 million barrels in a Bloomberg News survey of analysts. Stockpiles at Cushing, Oklahoma, the delivery point for the New York-traded West Texas Intermediate grade, gained 102,000 barrels, the biggest increase in a month.
Gasoline demand slid 2.2 percent to a four-week low of 8.94 million barrels a day, the Energy Department said. Supplies fell 1.05 million barrels to 204.5 million last week, the lowest level since June 2009. They were forecast to drop 500,000 barrels, according to the median of 15 analyst responses in the Bloomberg News survey.
The increase in crude inventories and decline in gasoline demand “suggested to many that oil demand has been hurt by high pump prices and an economy that is still having trouble walking upright on two feet,” Cameron Hanover Inc. said in a report dated May 4.
Brent, the European benchmark, traded at a premium of $11.95 a barrel to U.S. futures yesterday. The difference between front-month contracts in London and New York surged to a record $19.54 on Feb. 21. It averaged 76 cents last year.
Jobs Miss Estimates
Oil also declined on signs of weaker economic growth after U.S. companies added fewer jobs and service companies expanded less than forecast.
Employment rose by 179,000 in April from a revised 207,000 the prior month, according to figures from ADP Employer Services. The median estimate of 34 economists surveyed by Bloomberg News called for a 198,000 increase. Labor Department data tomorrow may show payrolls rose by 185,000 workers last month after 216,000 a month earlier, a separate poll showed.
The Institute for Supply Management’s index of non- manufacturing companies slumped to 52.8 in April, the lowest level since August, from 57.3 a month earlier. The median forecast of 73 economists surveyed by Bloomberg News was 57.5. Readings greater than 50 signal growth.
The Tempe, Arizona-based group’s index of the industry, which accounts for about 90 percent of the economy, averaged 56.1 in the five years to December 2007, when the last recession began. The ISM services survey covers industries that range from utilities and retailing to health care and transportation.
Put Options Active
The most-active oil options contracts in electronic trading were June 2011 $105 puts with 3,360 lots changing hands. They gained 23 cents to 82 cents a barrel. June $115 calls, the next- most active option, fell 54 cents to 51 cents a barrel. One contract covers 1,000 barrels of oil. Oil options volatility fell for the first day in three.
Oil has climbed 19 percent in New York this year as unrest in the Middle East and North Africa toppled leaders in Egypt and Tunisia and spread to Libya, Algeria, Bahrain, Iran, Oman, Syria and Yemen. Forces loyal to Muammar Qaddafi attacked rebel-held cities in western Libya as ministers from 22 nations prepared to meet in Rome to discuss ways to end the fighting.