Oil Snaps Rally to Highest in a Month as U.S. Stockpiles Forecast to Rise - Bloomberg

Oil snapped a rally to the highest price in more than a month yesterday as forecasts of rising crude supplies in the U.S. countered speculation Europe may contain its debt crisis and prevent a slump in demand.

Futures were little changed after advancing 2.3 percent yesterday before the release of Energy Department data today that may show supplies climbed 2 million barrels. An industry report showed they dropped a third week. German Chancellor Angela Merkel said yesterday that a European Union summit on Oct. 23 will be an “important step,” though not the final one, in solving the euro-area sovereign debt crisis.

“The market’s just looking for some sort of price direction,” said David Lennox, a resource analyst at Fat Prophets in Sydney, who predicts prices will trade between $80 and $90 a barrel. “Traders aren’t willing to push prices higher given the weak economic outlook in the U.S. and what’s happening in Europe.”

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