NEW YORK (Reuters) - U.S. crude oil futures fell on Tuesday on risk aversion amid doubts that the $1 trillion rescue package aimed at stabilizing the euro would work to keep Greece’s debt problems from spreading.
Prices stayed down more than 1 percent after the American Petroleum Institute reported that stockpiles at the Cushing, Oklahoma, delivery point for U.S. benchmark crude, rose again last week to another record, at 37.1 million barrels.
The API data, released after the floor settlement, also showed U.S. crude stockpiles rose far less than expected last week while gasoline supplies fell, when analysts had expected an increase.
U.S. crude for delivery in June was down 81 cents at $75.99 a barrel at 5 p.m. EDT (1700 GMT). Earlier, it settled down 43 cents at $76.37 a barrel, after trading from $75 to $77.68.
ICE Brent crude for June was up 10 cents at $80.22 a barrel. It had settled up 37 cents at $80.49.
Crude oil futures bounced off early lows and rose intraday, lifted by stronger refined products futures, higher demand growth forecasts by OPEC and the U.S. government and data showing continued rising oil demand in China.
Weakness was focused at the front-end of the U.S. futures curve, with the premium of July to June contract widening from $3.29 a barrel on Monday to $3.93 in late Tuesday trade, while the discount of U.S. futures to Brent widened $1.00 to $4.32 a barrel. Rising inventories at the Cushing delivery point for the New York Mercantile Exchange’s futures contract, have weighed on front-month futures over recent weeks.
“Certainly worries about Greece and Europe have not gone away. Also, concern about China inflation and the potential for further tightening. High Cushing crude stocks and expectations for additional supply builds provided some pressure and the stock market also was unable to sustain gains,” said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc in New York.
The API said that for the week to May 7, crude stocks rose 362,000 barrels, gasoline stocks were down 906,000 barrels and distillates, which including heating oil and diesel fuel, edged up 94,000 barrels. Stocks at the Cushing storage were up 783,000 barrels. <EIA/S>
Commodities and stock markets had rallied on Monday on the rescue package aimed at stabilizing the euro and keeping Greece’s debt problems from spreading.
The euro fell on Tuesday as concerns about the euro zone overcame the initial euphoria that followed announcement of the rescue package, while global. <USD/>
Global stocks slumped on Tuesday <MKTS/GLOB> and on Wall Street was mostly lower in volatile trade on fears the massive bailout for the euro zone won't solve the region's deep-seated problems. .N
Spot gold, often seen as a safe-haven for investors, vaulted 2.5 percent to a record high, highlighting the doubts many investors have over the rescue plan.
China’s inflation edged up to an 18-month high in Apriland bank lending topped expectations, which may curb oil prices if potential monetary tightening measures result in lower demand for fuel. But China’s apparent oil demand in grew by double digits for the eighth consecutive month in April.
The Organization of the Petroleum Exporting Countries raised its 2010 world oil demand growth forecast but said non-OPEC supplies would rise more than previously expected, while member compliance with production targets fell to 51 percent.
The U.S. Energy Information Administration also raised its 2010 world oil demand growth forecast from its previous estimate. The EIA also lifted its forecast for non-OPEC crude oil production growth in 2010.
U.S. gasoline and heating oil futures trimmed gains after the API data. They had settled about 1 percent higher, with traders citing news of a refinery snag and expected demand as the U.S. summer driving season approaches.
Also supportive was news that U.S. retail gasoline demand rose 1.4 percent in the week to May 7 from the previous week, according to MasterCard SpendingPulse data.
Additional reporting by Robert Gibbons in New York, Joe Brock in London and Alejandro Barbajosa in Singapore; Editing by David Gregorio
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