--Crude futures sink ahead of inventory report
--OPEC expected to keep production elevated
NEW YORK--Oil futures declined Wednesday ahead of a closely watched
report on U.S. oil inventories and a meeting of the world's biggest
oil exporters later this week.
Light, sweet crude for July delivery fell 96 cents, or 1.2%, to $82.36
a barrel on the New York Mercantile Exchange. Brent crude on ICE
Futures Europe fell 21 cents, or 0.2%, to $96.93 a barrel.
Futures were lower ahead of the U.S. government's weekly report on oil
and fuel stockpiles, expected to show oil inventories last week
falling 1.6 million barrels and refiners trimming operations,
according to a survey of analysts by Dow Jones Newswires.
But a report from the American Petroleum Institute, an industry group,
late Tuesday bucked those expectations. The API said crude stocks last
week rose 1.6 million barrels.
Oil market watchers closely follow the Energy Information
Administration's weekly inventory survey for cues on supply and demand
in the world's biggest oil consumer. Inventories last month were at
their highest level since 1990, as demand remains weak amid sluggish
economic growth.
Separately, traders are awaiting the outcome of a meeting of the
Organization of Petroleum Exporting countries in Vienna Thursday.
Saudi Arabia is widely expected to rebuff calls from other members to
rein in elevated production.
"We're just waiting for the OPEC meeting to fall apart," said John
Kilduff, founding partner at Again Capital. "I think that's going to
end in disarray.. and the Saudis will stand firm on their willingness
to pump."
Saudi Arabia has boosted production in recent months amid increasingly
stringent sanctions on Iran over the country's nuclear program.
Iranian production has fallen to around 20,000 barrels ad ay, from
around 3.5 million barrels a day at the end of last year, according to
the Energy Information Administration.
Still, other members, including Libya and Iraq, have seen production
return significantly over the last year.
Crude-oil prices have fallen more than 20% from their peak in the
spring, as the deepening euro-zone crisis spurs fears about weakening
global oil demand, and as production remains elevated in OPEC and
elsewhere, including the U.S.
Front-month July reformulated gasoline blendstock, or RBOB, recently
fell 0.43 cents, or 0.1%, to $2.6459 a gallon. July heating oil
slipped 0.61 cents, or 0.2%, to $2.6164 a gallon.
Write to Dan Strumpf at dan.strumpf@dowjones.com.
(END) Dow Jones Newswires
June 13, 2012 03:35 ET (07:35 GMT)
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