Oil Falls From $100 Record on Speculation U.S. Stockpiles Grew By Grant Smith and Christian Schmollinger
Feb. 20 (Bloomberg) -- Crude oil fell from a record $100.10 a barrel in New York on speculation that a U.S. Energy Department report will show stockpiles rose for a sixth week. Oil prices declined as traders sold contracts to lock in profits from yesterday's 4.7 percent gain. Crude inventories probably climbed to 303.4 million barrels in the week ended Feb. 15 from 301.1 million barrels as heating-fuel use slows, according to responses in a Bloomberg survey. ``The factors that led us to believe that prices are going to come down are still there,'' Lehman Brothers Holdings Inc.'s chief energy economist Edward Morse said in a Bloomberg television interview. ``We're in the refinery maintenance season, crude oil inventories have been building not just in the U.S. but Europe.'' Crude oil for March delivery dropped as much as $1.41, or 1.4 percent, to $98.60 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $99.50 at 1:20 p.m. in London. Yesterday, futures soared $4.51 to settle at $100.01 a barrel on the New York Mercantile Exchange, the first time oil closed over $100 and the biggest one-day gain in two months. Futures reached $100.10, the highest intraday price since trading began in 1983. Oil prices have separated from equity markets with this week's surge above $100 a barrel and a will reach fresh records this year, Goldman Sachs Group Inc. analysts said. ``Economic growth concerns have been trumped by long-term structural supply issues that recent news flow has highlighted,'' Goldman analysts including Jeffrey Currie in London said in a report received by e-mail today. Brent Crude Brent crude for April settlement fell as much as $1.68, or 1.7 percent, to $96.88 a barrel on London's ICE Futures Europe exchange. The contract traded at $97.63 a barrel at 1:21 p.m. London time. The Organization of Petroleum Exporting Countries, set to meet on March 5, may cut output as winter heating demand wanes, oil ministers from Algeria and Iran said in the past week. ``One of the factors driving the oil price is whether OPEC nations will decrease production on weaker demand in the second quarter,'' said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. ``We can't see that happening with prices at $95 to $100 per barrel.'' Oil has gained 15 percent since its intraday low of $86.24 a barrel on Feb. 7. That was the lowest crude reached this year, prompting officials from OPEC member countries to consider output cuts to defend the $80 price level. Nigeria Attacks The record was the third time oil has reached $100. Oil rose to a then-record $100.09 a barrel in New York on Jan. 3, a day after touching $100 for the first time on militant attacks in Nigeria, Africa's biggest producer. The Movement for the Emancipation of the Niger Delta, a militant group behind assaults on oil facilities, is calling for access to a rebel held by the government. Nigeria's detention of MEND's Henry Okah aided yesterday's record oil price, according to analysts at Barclays Capital in London. The Energy Department report will be released tomorrow at 10:30 a.m. in Washington, a day later than usual because of the President's Day holiday on Feb. 18. Crude supplies probably gained 2.28 million barrels in the week ended Feb. 15 from 301.1 million barrels, according to the median of response in a Bloomberg survey. Gasoline inventories probably climbed 500,000 barrels from 229.2 million, according to the responses. Supplies of distillate fuels, a category that includes heating oil and diesel, fell 2 million barrels from 127 million the prior week, according to the survey. To contact the reporter on this story: Grant Smith in London at [EMAIL PROTECTED] Last Updated: February 20, 2008 08:26 EST
