Futures also dropped for the first time in five days because of concern European officials may fail to agree on how to contain a regional debt crisis that poses a threat to growth. Hungary’s sovereign credit rating was reduced by Moody’s Investors Service yesterday. Crude failed to breach long-term technical resistance at $89.84 a barrel, the 50 percent Fibonacci retracement of the drop to $32.40 in December 2008 from a record high of $147.27 in July that year.
“Oil is taking a breather given that we’re at pretty high levels after putting on about 6 percent last week,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “It could be a bit of profit-taking. There wasn’t a lot of data overnight, although Moody’s have downgraded Hungary.”
The January contract fell as much as 58 cents, or 0.7 percent, to $88.80 a barrel, in electronic trading on the New York Mercantile Exchange, and was at $89.06 at 12:19 p.m. Sydney time. Yesterday, it rose 19 cents to $89.38, the highest since Oct. 7, 2008. Prices have gained 12 percent this year.
Crude climbed yesterday amid speculation the U.S. may extend stimulus measures and on cold-weather forecasts for the U.S. and Europe. That pushed oil prices 6.3 percent higher since the close on Nov. 30, the best four-day stretch since Aug. 3.
Brent crude for January settlement lost as much as 54 cents, or 0.6 percent, to $90.91 a barrel on the ICE Futures Europe exchange in London. Yesterday, it gained 3 cents to $91.45.
U.S. Inventories
U.S. oil supplies probably dropped for the first time in three weeks on increased demand from refiners as they boosted production, a Bloomberg News survey showed.
Inventories fell 1.5 million barrels, or 0.4 percent, in the seven days ended Dec. 3 from 359.7 million a week earlier, according to the median of eight analyst estimates before an Energy Department report tomorrow.
Gasoline stockpiles probably rose 875,000 barrels, or 0.4 percent, from 210.2 million, the survey showed. It would be the third straight gain, the longest sequence of increases since August. Supplies of distillate fuel, a category that includes heating oil and diesel, probably fell 550,000 barrels, or 0.3 percent, from 158.1 million, the survey said.
The department is scheduled to release its weekly report at 10:30 a.m. tomorrow in Washington.
Gasoline Falls
Gasoline futures have fallen for a third day after Irving Oil Corp. and Valero Energy Corp. returned refinery units to service, upping production of the fuel.
Gasoline for January delivery dropped as much as 1.17 cents, or 0.5 percent, to $2.33 a gallon in New York. The contract fell 1.04 cents, or 0.4 percent, to settle at $2.3417 yesterday.
Irving finished maintenance on a residual fluid catalytic cracker at its Saint John refinery in New Brunswick, Lesley Dickson, a company spokeswoman, said in an e-mail.
The Saint John refinery exports about 175,000 barrels of petroleum products a day to markets in the northeastern U.S., including New York Harbor, the delivery point of Nymex gasoline and heating oil contracts.
Valero started a fluid catalytic cracker at its Memphis plant over the weekend, Bill Day, a company spokesman, said in an e-mail.
