Crude oil fell for a sixth day, the longest losing streak in a month, on concern supplies are more than sufficient to meet demand as the pace of global economic recovery may be slow.
Oil traded below $78 a barrel after Qatar’s Energy Minister Abdullah bin Hamad al-Attiyah said yesterday the Organization of Petroleum Exporting Countries won’t change its output quotas because markets are well-stocked. Consumer confidence in the U.S., the world’s biggest energy user, rose less than forecast in January, missing the median economist estimate.
“It looks like a little bit of a swing in sentiment,” said Mark Pervan, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. “The market’s been held up by some sentiment issues and some less-solid fundamental factors such as some of the economic data and some of the weather forecasts. The hard supply and demand numbers behind it really don’t hold up all that strongly.”
Crude oil for February delivery fell as much as 93 cents, or 1.2 percent, to $77.07 a barrel in electronic trading on the New York Mercantile Exchange. The contract, which expires Jan. 20, was at $77.87 a barrel at 3:20 p.m. in Singapore. The more widely traded March futures lost 15 cents to $78.22 a barrel.
Prices dropped 5.7 percent last week, the first weekly decline in five, after U.S. crude oil and refined-product stockpiles rose and temperatures climbed.
The Reuters/University of Michigan preliminary index of U.S. consumer sentiment increased to 72.8 from 72.5 in December. It was forecast to strengthen to 74, according to the median of 68 economists surveyed by Bloomberg News. JPMorgan Chase & Co., the first of the largest U.S. banks to post fourth-quarter earnings, Jan. 15 reported a loss in retail banking.
‘Real Fundamentals’
“People are coming back to real fundamentals, and really suggesting that perhaps we are awash with some commodities and we just don’t have economic performance to substantiate” higher prices, Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney, said in a Bloomberg Television interview. “We’re seeing adverse weather conditions ease, we’re seeing inventories once again build.”
U.S. distillate fuel stockpiles, including heating oil and diesel, increased in the week ended Jan. 8, snapping a four-week drawdown, according to the Energy Department. Crude oil and gasoline inventories climbed for a second week.
Temperatures in the U.S. northeast, which consumes four- fifths of the country’s heating oil, will probably be above average through Jan. 27, according to the National Weather Service. Oil rallied 4.3 percent in the first 10 days of 2010 as demand for heating fuels gained during a cold snap.
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