Oil Drops to Six-Month Low on Supply, Greece (Update 5)

Oil fell to the lowest level in more than six months as U.S. supplies grew to the most since 1990 and talks to form a coalition government in Greece collapsed, raising concern that Europe’s debt crisis will worsen. Prices declined for a fourth day as the Energy Department reported oil inventories climbed 2.13 million barrels last week to 381.6 million. Supplies were forecast to grow 1.75 million barrels. Greece will schedule new elections next month, which German Finance Minister Wolfgang Schaeuble said will be a referendum on whether the country stays in the euro. “We are still not out of the woods yet,” said Tom Bentz, a director with BNP Paribas Prime Brokerage Inc. “The focus is still on Europe. All the markets are going to be dependent on how things go there.” Crude oil for June delivery fell 75 cents, or 0.8 percent, to $93.23 a barrel at 12:04 p.m. on the New York Mercantile Exchange. Oil traded at $93.37 a barrel before release of the inventory report at 10:30 a.m. Prices have fallen 16 percent since touching $110.55 a barrel in intraday trading March 1. Brent oil for June settlement, which expires today, slipped 61 cents, or 0.5 percent, to $111.63 a barrel on the London- based ICE Futures Europe exchange. The more-actively traded July futures retreated 0.7 percent to $110.67. Inventories at Cushing, Oklahoma, the delivery point for Nymex futures, gained 2.3 percent to 45.1 million barrels, the highest level on record, the Energy Department reported. Greek Election A Greek caretaker government will prepare new elections, probably on July 17, after President Karolos Papoulias failed to broker a governing coalition in meetings with other political leaders, Fotis Kouvelis, head of the Democratic Left party, said. “Europe is really dictating trading,” Essaye said. The European Central Bank has no immediate plans to increase stimulus even as market tensions mount, two euro-area officials said. The bank is conducting a comprehensive review of all its policy tools to assess the effectiveness of measures including the bond-buying program and long-term refinancing operations, they said. It is scheduled to be completed in June or July. A third official said the ECB may not consider taking any further policy action until July, and that the bank sees current market tensions as a way of focusing politicians’ minds on reform efforts.