Oil futures settled with a loss on Tuesday, as traders bet that weekly data will show another increase in U.S. crude supplies.
The expiration of the May futures contracts on the New York Mercantile Exchange exacerbated the decline for oil. May crude which went off the board at the close, fell $1.12, or 2%, to settle at $55.26 a barrel on the New York Mercantile Exchange, after posting gains over the previous seven of eight trading sessions. June crude which became the front-month contract, fell $1.27, or 2.2%, to $56.61 a barrel. June Brent crude on London’s ICE Futures exchange lost $1.37, or 2.2%, to $62.08 a barrel. “Oil prices are mostly consolidating this week with few major catalysts driving the story up or down,” said Richard Hastings, macro strategist at Global Hunter Securities. He said there is “some caution” ahead of the weekly storage estimates from the American Petroleum Institute late Tuesday, and pointed out that refinery utilization will be key. “If that holds up, then excess crude oil going into storage would be limited,” said Hastings.
Separately, the Energy Information Administration will release its petroleum-supply data, covering the week ended April 16, on Wednesday. It’s already reported increases in crude inventories for each of the last 14 weeks. “U.S. crude inventories are expected to build further in coming weeks from already record levels, likely peaking this month and most likely remaining at elevated levels over the course of 2015, analysts at J.P. Morgan said in a note Tuesday.
For the latest weekly reports, analysts polled by Platts forecast an increase of 2.6 million barrels in crude stockpiles. They also expect to see a decline of 1.4 million barrels in gasoline supplies and a climb of 500,000 barrels in distillate inventories, which include heating oil.