Oil Falls After Biggest U.S. Supply Gain in More Than 7 Years

By Mark Shenk

Aug. 20 (Bloomberg) -- Crude oil fell more than $1 a barrel after a government report showed the biggest U.S. inventory gain in more than seven years.

Stockpiles rose 9.39 million barrels to 305.9 million barrels, the biggest gain in since March 2001, the Energy Department said. Supplies fell the previous week as Tropical Storm Edouard hit Texas. Inventories were forecast to increase 1 million barrels, according to a Bloomberg News analyst survey.

``Deliveries are bouncing back from Edouard,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``Imports are also up because there is plentiful crude available.''

Crude oil for September delivery fell $1.64, or 1.4 percent, to $112.89 barrel at 11:33 a.m. on the New York Mercantile Exchange. Futures touched a 15-week low of $111.34 a barrel on Aug. 15. Prices are up 59 percent from a year ago.
By Mark Shenk

Aug. 20 (Bloomberg) -- Crude oil fell more than $1 a barrel after a government report showed the biggest U.S. inventory gain in more than seven years.

Stockpiles rose 9.39 million barrels to 305.9 million barrels, the biggest gain in since March 2001, the Energy Department said. Supplies fell the previous week as Tropical Storm Edouard hit Texas. Inventories were forecast to increase 1 million barrels, according to a Bloomberg News analyst survey.

``Deliveries are bouncing back from Edouard,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``Imports are also up because there is plentiful crude available.''

Crude oil for September delivery fell $1.64, or 1.4 percent, to $112.89 barrel at 11:33 a.m. on the New York Mercantile Exchange. Futures touched a 15-week low of $111.34 a barrel on Aug. 15. Prices are up 59 percent from a year ago.

U.S. fuel demand averaged 20.2 million barrels a day during the past four weeks, down 3 percent from a year earlier, the department said. Gasoline consumption averaged 9.46 million barrels a day over the period, down 1.6 percent.

Refineries operated at 85.7 percent of capacity in the week ended Aug. 15, down 0.2 percentage point from the week before and the lowest since the week ended May 2, the report showed.

Gasoline Stockpiles

Gasoline supplies dropped 6.2 million barrels, more than double the 3 million-barrel decline analysts predicted. Stockpiles have dropped 9.5 percent in the past four weeks.

Gasoline for September delivery fell 2.74 cents, or 1 percent, to $2.8365 a gallon in New York. Futures reached a record $3.631 a gallon on July 11.

Pump prices haven't increased since July 19, according to the AAA, the nation's largest motorist organization. Regular gasoline, averaged nationwide, fell 1.3 cents to $3.717 a gallon, the AAA said today on its Web site. Prices reached a record $4.114 a gallon on July 17.

The BP-led Baku-Tblisi-Ceyhan pipeline, which transports oil from Azerbaijan to the Mediterranean, plans to resume tanker loadings next week, the pipe's operating company said today. Exporters of Azeri oil have been unable to use the 1,100-mile link through Georgia and Turkey since Aug. 5, when a fire engulfed the pipeline in northeastern Turkey.

Georgian Black Sea ports are running out of crude and oil- product supplies as Russian military troops block railways near the city of Khashuri, local shipping agent TeRo Co. Ltd. said.

Brent crude oil for October settlement fell $1.02, or 0.9 percent, to $112.23 a barrel on London's ICE Futures Europe exchange.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.
U.S. fuel demand averaged 20.2 million barrels a day during the past four weeks, down 3 percent from a year earlier, the department said. Gasoline consumption averaged 9.46 million barrels a day over the period, down 1.6 percent.

Refineries operated at 85.7 percent of capacity in the week ended Aug. 15, down 0.2 percentage point from the week before and the lowest since the week ended May 2, the report showed.

Gasoline Stockpiles

Gasoline supplies dropped 6.2 million barrels, more than double the 3 million-barrel decline analysts predicted. Stockpiles have dropped 9.5 percent in the past four weeks.

Gasoline for September delivery fell 2.74 cents, or 1 percent, to $2.8365 a gallon in New York. Futures reached a record $3.631 a gallon on July 11.

Pump prices haven't increased since July 19, according to the AAA, the nation's largest motorist organization. Regular gasoline, averaged nationwide, fell 1.3 cents to $3.717 a gallon, the AAA said today on its Web site. Prices reached a record $4.114 a gallon on July 17.

The BP-led Baku-Tblisi-Ceyhan pipeline, which transports oil from Azerbaijan to the Mediterranean, plans to resume tanker loadings next week, the pipe's operating company said today. Exporters of Azeri oil have been unable to use the 1,100-mile link through Georgia and Turkey since Aug. 5, when a fire engulfed the pipeline in northeastern Turkey.

Georgian Black Sea ports are running out of crude and oil- product supplies as Russian military troops block railways near the city of Khashuri, local shipping agent TeRo Co. Ltd. said.

Brent crude oil for October settlement fell $1.02, or 0.9 percent, to $112.23 a barrel on London's ICE Futures Europe exchange.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.