Oil falls to near $92 on high US supplies

Oil falls to near $92 on high US supplies

SINGAPORE - The Associated Press
Oil falls to near $92 on high US supplies

A US flag waves beside a pumpjack at an oil facility in New Mexico. REUTERS photo

Oil prices dropped to fresh six-month lows near $92 a barrel yesterday in Asia after a report showed U.S. crude supplies surged more than expected last week.

Benchmark oil for June delivery was down $1.84 to $92.14 a barrel, the lowest since November, at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 80 cents to settle at $93.98 in New York on May 15.

Brent crude for July delivery was down $1.20 at $110.25 per barrel in London.

The American Petroleum Institute said late on May 15 that crude inventories rose 6.6 million barrels last week while analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had predicted an increase of 1.5 million barrels.

Inventories of gasoline fell 2.6 million barrels last week while distillates tumbled 1.6 million barrels, the API said.

22 year high

Crude has plunged more than 12 percent from $106 earlier this month amid investor concern global economic growth will slow more than previously expected this year. U.S. crude inventories are at a 22-year high amid weak demand and growing production.

Traders fear Greece may drop the euro currency, which could trigger a loss of confidence in other debt-burdened European countries such as Spain and Italy.

Europe is already teetering near recession this year, and further political turmoil could hurt economic activity and demand for crude.

“The chances that Greece will leave the eurozone sooner rather than later are growing,” Capital Economics said in a report.

“The key question remains whether the policymakers can prevent contagion effects from prompting a bigger and much more damaging breakup of the currency union.”

In other energy trading, heating oil was down 2.3 cents at $2.91 per gallon and gasoline futures slid 2.7 cents at $2.87 per gallon. Natural gas rose 0.6 cents at $2.51 per 1,000 cubic feet.