Crude Oil Futures May Decline This Week

Crude oil futures in New York may decline this week, according to a Bloomberg News survey of 42 traders and analysts, after a rally last week boosted prices 2.5%.

“Gasoline and crude oil have had a tremendous build-up on factors that have been well known for months, which is a setup for a massive fall,” said Tim Evans, senior energy analyst with New York-based researcher IFR Markets.

“We’ve been focused on the relatively low level of stocks, refinery maintenance, new fuel specifications and import problems for a long time now,” he said.

Gasoline futures closed at a record each day last week, pulling crude oil higher.

William Greehey, chief executive officer of Valero Energy Corp., the third-biggest U.S. refiner, said parts of the country may run short of fuel this summer. U.S. inventories of the motor fuel in the week ended April 23 were 2.7% lower than a year earlier, while demand was 11% higher, the Energy Department said.

Nineteen of the 42 oil-industry analysts who responded to the weekly Bloomberg poll said New York crude oil prices would fall this week. Ten said they would be little changed and 13 predicted an increase. Respondents were evenly split about the direction of futures a week ago.

Any decline in price may be tempered by concern about security in the Middle East after a second week of attacks near oil facilities in the Persian Gulf region.

On Saturday, five foreign employees of Swiss engineering company ABB Ltd. were shot to death by gunmen in the town of Yanbu, Saudi Arabia, where they were working at a refinery run by Exxon Mobil Corp. and Saudi Arabian Basic Industries Corp.

Last week, insurgents tried to blow up Iraq’s Persian Gulf crude oil terminals using explosives-laden boats. That contributed to an increase in the price of crude oil for June delivery by 2.5% for the week to $37.38 a barrel on the New York Mercantile Exchange. Futures were 45% higher than a year earlier.

Pump prices have followed futures higher. The average national price of a gallon of regular self-serve gasoline was steady at a record $1.803 a gallon Thursday, according to AAA, formerly the American Automobile Assn.