Oil Falls Fourth Time in Five Days on Production; production rose to highest level since July 1992
West Texas Intermediate oil fell for the fourth time in five days as a government report showed production rose to the highest level since July 1992 and gasoline demand waned.
Prices dropped as much as 1.8 percent as the Energy Information Administration said output climbed 0.4 percent to 7.2 million barrels a day. Gasoline consumption fell for a second week. Oil also declined as the dollar strengthened against the euro and U.S. equities decreased. BNP Paribas SA (BNP) cut its 2013 forecasts for Brent and WTI to reflect the price drop in the first quarter.
“Fundamentally, we should be at these prices or maybe even a little bit lower,” said Tariq Zahir, a New York-based commodity fund manager at Tyche Capital Advisors. “Prices should be trading around $85. We are seeing the dollar up and equities down, and that’s definitely putting some pressure on crude.”
WTI for May delivery fell $1.42, or 1.6 percent, to $87.30 a barrel at 10:57 a.m. on the New York Mercantile Exchange. The volume of all futures traded was 55 percent above the 100-day average for the time of day. The contract closed at $88.71 on April 15, the lowest level since Dec. 24. Prices have tumbled 7.8 percent since April 10.
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“The oil market is looking quite weak, and there’s a comfortable supply-demand situation in the short term,” said Gerrit Zambo, an oil trader at Bayerische Landesbank in Munich, who predicts Brent, the European benchmark, may tumble to $80 a barrel in the first half.
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http://www.bloomberg.com/news/2013-04-17/oil-falls-fourth-time-in-five-days-on-inventories-outlook.html
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