Crude followed equity markets lower, reversing gains made last week after the US economy lost fewer jobs than anticipated. The Standard & Poor’s 500 Index dropped 2.2% while the Dow Jones Industrial Average dropped 1.8%. US oil inventories most likely gained for a 10th week, as per the news survey.
“The correlation with the U.S. equity markets is very high at the moment,” said Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. “The market is a little ahead of itself and it’s no surprise to see a bit of a pullback.”
US stockpiles most likely gained one million barrels last week, as per the median of 12 responses in a news survey. The stockpiles increased to 375.3 million barrels in the week ended May 1, 2009 the highest since September 1990, as per the Energy Department data.
“Unless we see some really deteriorating numbers out of the U.S. in the way of economic data, I don’t see the oil price coming back further than the current levels,” Pervan said.
Brent crude oil for June 2009 settlement dropped as much as 28 cents, or 0.5%, to $57.20 a barrel on London’s ICE Futures Europe exchange. The contract was at $57.39 a barrel at 12:11 p.m. Singapore time. It dropped 66 cents, or 1.1%, to end the session at $57.48 a barrel on May 11, 2009.
