Millennium Post

Oil down on stockpile forecasts, eurozone fears

Oil was down in quiet Asian trade today on forecasts of a US stockpile gain as well as amplified worries over the eurozone after Spain announced that it had fallen into recession, analysts said.

New York's main contract, light sweet crude for delivery in June, shed 15 cents to USD 104.72 per barrel and Brent North Sea crude for June delivery retreated 16 cents to USD 119.31.

Stock markets in China, Hong Kong, India, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand are closed today for a public holiday.

Expectations of a build-up in US crude inventories coupled with heightened worries over the economic state of the eurozone weighed on crude prices, said Jason Hughes, head of premium client management for IG Markets Singapore.

'The estimates coming in that US stockpiles would have increased yet again and also the uncertainty that still remains over the eurozone and the Spanish officially entering recession for the second time since 2009' hit crude prices, he said.

An analyst poll forecast that US crude stockpiles would rise by 2.3 million barrels for the week ended 27 April, representing another increase in inventories after a larger than expected spike recorded last week.

The stockpile gains indicate flagging energy demand in the world's largest oil consumer, which is bearish for oil markets.

Meanwhile, Spain's announcement on late Monday that it had officially entered a recession after its economy contracted for the second straight quarter aggravated trader fears over the state of the troubled eurozone economy.
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