August 16, 2005


Oil Falls for 2nd Day on Speculation U.S. Supplies Are Adequate (Bloomberg, 8/16/05)

Crude oil fell for a second day, its biggest two-day drop in a month, on speculation the U.S. is accumulating sufficient stockpiles of winter fuels.

A U.S. Energy Department report tomorrow may show supplies of distillates, including heating oil and diesel, rose for a 13th consecutive week, according to a Bloomberg survey. Crude inventories also probably increased last week. Gasoline demand is poised to drop next month as the peak summer driving period ends.

``The U.S. isn't that badly placed'' in terms of inventories, said Peter Luxton, an analyst with Informa Global Markets in London. ``Refineries have been switching to production of distillates for more than a month. At some stage that is going to kick into prices and there could be a sharp drop.''

Hopefully Mr. Krugman is banging away at that oil bubble column so the Gray Lady doesn't miss the story altogether.

Posted by Orrin Judd at August 16, 2005 12:00 AM
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