Oil May Fall on Supply Gain, Demand Drop, Survey Says (Update1)
By Mark Shenk and Christian Schmollinger
June 27 (Bloomberg) -- Crude oil may fall next week because of rising supplies and declining fuel demand in the U.S., the country responsible for almost a quarter of global consumption.
Eleven of 24 analysts surveyed by Bloomberg News, or 46 percent, said prices will decline through July 3. Nine of the respondents, or 38 percent, said oil will rise and four forecast little change. Last week 46 percent said futures would fall.
``Demand in the U.S. has certainly been weakening,'' said Victor Shum, senior principal at Purvin & Gertz Inc. in Singapore. ``If there is a clear indication of demand falling in some of the key developing markets, like China, then there will be more significant pull back in oil prices.''
U.S. crude-oil inventories gained 803,000 barrels to 301.8 million last week, the Energy Department said in a June 25 report. Fuel consumption averaged 20.2 million barrels a day in the past four weeks, down 2.3 percent from a year earlier, the report showed.
Crude oil for July delivery rose $4.07, or 3 percent, to $139.43 a barrel so far this week on the New York Mercantile Exchange. Futures reached $140.39 a barrel yesterday, the highest since trading began in 1983. All of the responses were gathered before prices rallied to the record.
Analyst responses have been bearish in 23 of the past 24 weeks. The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.
Bloomberg's survey of oil analysts and traders, conducted each Thursday, asks for an assessment of whether crude oil futures are likely to rise, fall or remain neutral in the coming week. The results were:
RISE NEUTRAL FALL 9******* 4****** 11 To contact the reporter on this story: Mark Shenk in New York at email@example.com; Christian Schmollinger in Singapore at firstname.lastname@example.org