Crude oil may decline: survey

Seventeen of 40 analysts, or 43 percent, said futures will drop through Dec. 18. Twelve respondents, or 30 percent, forecast that the market will gain and 11 said prices will be little changed. Last week, 51 percent of analysts said oil would decline.

Gasoline stockpiles climbed 2.25 million barrels to 216.3 million last week, the highest since the week ended April 17, an Energy Department report on Dec. 9 showed. Supplies of distillate fuel, a category that includes heating oil and diesel, increased 1.62 million barrels to 167.3 million.

“The drop in prices has been spurred on by the massive supply overhang,” said Richard Ilczyszyn, a senior market strategist with Lind-Waldock & Co. in Chicago.

Total U.S. daily fuel demand averaged 18.5 million barrels in the four weeks ended Dec. 4, down 3 percent from a year earlier, the supply report showed. Consumption of distillate fuel averaged 3.5 million barrels a day over the period, down 8.3 percent.

Crude oil for January delivery dropped US$4.93, or 6.5 percent, to US$70.54 a barrel so far this week on the New York Mercantile Exchange. Futures are up 58 percent this year.

The oil survey has correctly predicted the direction of futures 46 percent of the time since its start in April 2004.

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