Oil Trades Near Lowest Since November on Crude Stockpiles, Egypt

Oil traded near the lowest since November in New York after analysts forecast crude stockpiles in the U.S. will increase for a fifth week and as tensions eased in Egypt after the ouster last week of President Hosni Mubarak.

Futures slipped to the lowest in almost 11 weeks yesterday after the Egyptian army dissolved parliament and suspended the constitution to meet opposition demands. An Energy Department report tomorrow may show crude inventories rose 2.5 million barrels last week from 345.1 million barrels, according to the median of 10 analyst estimates in a Bloomberg News survey.

“There’s a considerable fundamental overhang in this market, and as the geopolitical premium bleeds out, it’s going to be difficult for the market to maintain these levels,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. Oil below $85.11 is “back in the congestion zone from October and November of last year.”

Crude for March delivery was at $84.95 a barrel, up 14 cents, in electronic trading on the New York Mercantile Exchange at 10:34 a.m. Sydney time. The contract slipped 77 cents to $84.81 yesterday, the lowest since Nov. 30. Prices are 15 percent higher in the past year.

The Egyptian army, which assumed power after Mubarak’s ouster Feb. 11, told protesters it will respond to their demands by the end of the week, Ahmed Maher, a co-founder of the Six of April opposition group said yesterday. His organization is part of the Revolution’s Youth Coalition, the group that helped orchestrate the street protests that started Jan. 25.

Brent crude for April settlement gained $2.14, or 2.1 percent, to $103.08 a barrel on the London-based ICE Futures Europe exchange yesterday, the highest since Sept. 26, 2008. The March contract expired on Feb. 11 at $101.43.

Feb 15^th, 2011

Source: Bloomberg.com