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Oil falls a second day on adequate fuel supplies Original Source Link: (May no longer be active)
http://www.bloomberg.com/apps/news?pid=10000087&sid=atA3qJCdFYSs&refer=top_world_newshttp://www.bloomberg.com/apps/news?pid=10000087&sid=atA3qJCdFYSs&refer=top_world_news
Oil Falls a Second Day on Signs of Adequate U.S. Fuel Supplies
Feb. 7 (Bloomberg) -- Crude oil fell a second day in New York on speculation rising U.S. oil inventories will be sufficient to meet demand should shipments from Iran, the world's fourth-largest producer, be disrupted.
Oil supplies, already 11 percent higher than the five-year average, probably gained another 1 million barrels last week, based on the median forecast from a Bloomberg survey of nine analysts. Prices jumped 1 percent on Feb. 3, the day before the United Nation's nuclear watchdog met to refer Iran to the Security Council over its resumption of nuclear research.
``Oil supplies are in pretty good shape,'' said Mark Waggoner, president of Excel Futures Inc. in Huntington Beach, California. ``Crude oil should be a lot lower than it is. Supplies are building.''
Crude oil for March delivery fell as much as 36 cents, or 0.6 percent, to $64.75 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It was at $64.77 at 8:09 a.m. in Singapore, 43 percent higher than a year ago.
Yesterday, the March contract fell 26 cents, or 0.4 percent, to $65.11 a barrel, after earlier trading as high as $66.62. Concern that Iran would retaliate against UN sanctions by cutting shipments helped push prices up 11 percent last month.
``The Iranian news has been propping up prices,'' Marshall Steeves, an energy analyst at Man Financial Inc. in New York said yesterday. ``Once it became clear that oil was having a hard time staying above $66 the funds began to sell. There is no immediate threat of a disruption and unless we have a prolonged disruption supplies are sufficient.''
Iranian Response
Iran said Feb. 4 it would resume uranium enrichment, a process that can be used to develop an atomic bomb, after the International Atomic Energy Agency referred the country to the Security Council, a process that could result in sanctions.
Iran told the agency it has until mid-February to remove surveillance cameras and nuclear equipment seals meant to ensure that the country complies with treaty commitments, the Associated Press reported yesterday, citing agency director- general Mohamed ElBaradei.
``Anywhere around $64 to $65 is the place to buy'' oil, said Excel's Waggoner. ``We're going right back up again. This Iran thing is just going to outweigh everything else.''
The U.S. Energy Department will publish its weekly stockpile report tomorrow. It will probably show gasoline stockpiles, 3 percent higher than the five-year average, gained another 2.5 million barrels, based on the analysts survey. Supplies of distillates, which include heating oil and diesel, probably gained 450,000 barrels.
Weather, Products
``Relatively moderate weather, ample supplies and an escalation in the dispute over Iran's nuclear program should make for another week of high volatility,'' Michael Fitzpatrick, vice president of energy risk management at Fimat USA in New York, said yesterday. ``Absent geopolitical uncertainty, prices should be moving lower.''
Heating oil for March delivery was at $1.7566 a gallon in after-hours trading, after falling 1.88 cents, or 1.1 percent, to $1.7628 yesterday, the lowest close since Jan. 18.
Gasoline for March delivery was at $1.6340 a gallon in after-hours trading after plunging 3.75 cents, or 2.2 percent, to $1.6442 yesterday, the lowest close since Dec. 28.
Last Updated: February 6, 2006 19:27 EST
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