Airlines profits to soar as OIL supplies hit 22yr high
Brent oil declined to its lowest in five months before a report that may show U.S. stockpiles climbed to the highest level since 1990 and after economic confidence in the euro area fell more than forecast.
Brent futures dropped below $105 a barrel in London for the first time since Dec. 20. In the U.S., prices are heading for the biggest monthly drop in more than three years. American crude inventories rose 800,000 barrels to 383.3 million last week, according to the median estimate of eight analysts in a Bloomberg News survey before the Energy Department report tomorrow. Economic confidence in the euro area fell to its lowest since 2009, a European Commission report today showed.
“Investors are pulling out with increasing problems in the euro zone,” said Thina Margethe Saltvedt, an analyst at Nordea Bank AB (NDA) in Oslo. “That’s pulling the market lower. The U.S. market seems to be more-than-well-supplied.”
Brent oil for July settlement fell as much as $2.14, or 2 percent, to $104.54 a barrel on the London-based ICE Futures Europe exchange. It was at $104.96 at 1:17 p.m. London time. The European benchmark contract’s premium to West Texas Intermediate narrowed to $15.59 from $15.92 yesterday.
WTI crude for July delivery on the New York Mercantile Exchange was down $1.39, or 1.5 percent, at $89.37. The contract yesterday slid 10 cents to $90.76, the lowest close since May 24. Prices are down 15 percent this month, the biggest drop since December 2008.
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