Oil Tumbles to Seven-Month Low on U.S. Supply Glut

Source: Bloomberg

By Mark Shenk - 2012-05-30T15:19:01Z

Oil tumbled to a seven-month low on speculation that U.S. crude stockpiles climbed to the highest level since 1990 and as the euro weakened on concern that the debt crisis will overwhelm Spain.

New York futures fell as much as 3.6 percent and Brent oil traded in London dropped below $104 a barrel for the first time this year. An Energy Department report tomorrow is projected to show that U.S. supplies rose 1 million barrels to 383.5 million last week, according to analysts surveyed by Bloomberg. The euro fell versus the dollar as Spain’s default risk increased.

“We’re looking at a build of another million barrels to a 22-year high,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut. “Given how high inventories are and how weak the economy looks, no wonder we’re trading lower. We’re going to probably continue seeing dollar strength, which will keep the pressure on oil.”

Oil for July delivery fell $2.82, or 3.1 percent, to $87.94 a barrel at 11:17 a.m. on the New York Mercantile Exchange. Futures reached $87.49, the lowest intraday level since Oct. 24. Prices are down 16 percent this month, the biggest drop since December 2008.

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http://www.bloomberg.com/news/2012-05-30/brent-oil-falls-below-105-on-u-s-supply-glut-europe-co.html

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