By Ben Sharples - Oct 26, 2011 8:34 AM GMT+0700
Oil declined from a 12-week high in New York on concern that plans to tackle Europe’s debt crisis will falter as crude stockpiles rise in the U.S., the world’s biggest consumer of the commodity.
Futures slipped as much as 0.9 percent, falling for the first time in four days. European finance chiefs canceled a meeting today before national leaders hold a summit to agree on a blueprint to rein in the crisis. Crude inventories climbed 2.71 million barrels last week, according to the American Petroleum Institute. An Energy Department report today may show supplies increased 1.48 million barrels.
“The market is beginning to back off a little bit before tonight’s European summit,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “The market has run up quite a lot in advance. The cancellation of the finance ministers’ meeting has created a source of uncertainty.”
Crude oil for December delivery declined as much as 86 cents to $92.31 a barrel in electronic trading on the New York Mercantile Exchange and was at $92.82 at 12:28 p.m. Sydney time. The contract yesterday increased $1.90, or 2.1 percent, to $93.17, the highest settlement since Aug. 2. Prices are up 1.6 percent this year.
Brent oil for December settlement was at $111.16 a barrel, up 24 cents, on the London-based ICE Futures Europe exchange. The European benchmark contract was at a premium of $18.34 to New York crude, compared with a close of $17.75 yesterday and a record settlement of $27.88 on Oct. 14.
Europe, Stockpiles
European leaders are in Brussels today for the emergency summit. Finance ministers will now meet at an as-yet undetermined time after the summit to complete its main elements, including safeguarding banks and writing down Greek debt, according to a European Union official.
U.S. gasoline supplies rose 153,000 barrels to 209.7 million barrels last week, the API report showed. The Energy Department report was forecast to show inventories declined 1.75 million barrels, according to the median of 12 analyst estimates in a Bloomberg News survey.
The industry-funded API collects stockpile information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the Energy Department for its weekly survey.
Oil in New York also declined after reports showed consumer confidence in the U.S. unexpectedly sank and home prices stagnated.
The New York-based Conference Board’s household sentiment index slumped to 39.8 in October, the lowest level since March 2009 and less than the most pessimistic forecast in a Bloomberg News survey. Property values in 20 cities were little changed in August from the prior month and down 3.8 percent from 2010, according to S&P/Case-Shiller.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
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