Increase in stocks could push crude lower

March 28, 2010

New York : Crude oil may fall this week as US inventories increase on higher imports, a Bloomberg News survey showed.

Twenty-one of 55 analysts, or 38 per cent, forecast oil will decline through April 1.

Nineteen respondents, or 35 per cent, predicted that futures will be little changed and 15 said the contract will climb.

Last week, 45 per cent of analysts said there would be a drop in prices.

US stockpiles of crude oil rose 7.25 million barrels to 351.3 million a week ago week, leaving supplies 6.4 per cent above the five-year average for the period, according to an Energy Department report on March 24. It was the eighth straight advance and the longest string of gains since May.

Massive build

"(Last) week's massive build in crude inventories is likely to be a price-bearish spectre over the coming week," Jason Schenker, president of Prestige Economics, an Austin, Texas-based energy consultant, said.

Imports jumped 12 per cent to 9.4 million barrels a day in the week ended March 19, the highest level since September.

Refiners often schedule maintenance for March as winter heating-fuel consumption decreases and before the gain in gasoline demand that occurs in the summer.

Refineries operated at 81.1 per cent of capacity a week ago, up 0.6 percentage point from the previous week. Refinery operating rates last year peaked at 87.9 per cent in July.

The crude oil contract for May delivery declined 97 cents, or 1.2 per cent, to $80 a barrel last week on the New York Mercantile Exchange. Futures are up 47 per cent from a year earlier.

Source: http://gulfnews.com/business/oil-gas/increase-in-stocks-could-push-crude-lower-1.603765