Monday, February 23, 2009
Oil May Fall on Speculation Supply Is Adequate, Survey Shows
Monday, 23 February 2009
Crude oil futures may decline on speculation that U.S. inventories will be sufficient to meet demand from refineries. Fifteen of 35 analysts surveyed by Bloomberg News, or 43 percent, said futures will decline through Feb. 27. Eleven respondents, or 31 percent, forecast oil will increase and nine said that prices will be little changed. Last week, 43 percent of analysts expected prices would fall.
U.S. inventories declined 138,000 barrels to 350.6 million barrels last week, an Energy Department report showed yesterday. Supplies were forecast to gain by 3.2 million barrels, according to a Bloomberg News survey. The drop left stockpiles 15 percent higher than the five-year average, the department said.
“There’s a lot of crude oil available to meet demand, even after the surprise draw,” said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. “The oversupply should damp any major rallies.”
Crude oil for March delivery increased $1.97, or 5.3 percent, to $39.48 a barrel so far this week on the New York Mercantile Exchange. Prices have dropped 73 percent from the record $147.27 a barrel reached on July 11.
The oil survey has correctly predicted the direction of futures 48 percent of the time since its start in April 2004.
Source: Bloomberg
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