Oil Takes a Break Falling Nearly 1% Overnight

“Oil dropped from the highest price in almost three weeks in New York on signs U.S. crude supply is rising and speculation that Saudi Arabia may boost output.

Futures fell as much as 0.9 percent, their first decline in three days. A government report tomorrow may show that U.S. stockpiles rose to the highest level in six months last week, according to a Bloomberg News survey. Saudi Arabia’s cabinet will work with crude consumers and producers to restore “fair” prices, according to the state news agency. Prices may be boosted as much as 30 percent by a European embargo on Iranian oil to take effect in July, saidChristine Lagarde, managing director of the International Monetary Fund.

“The market is currently well-supplied with oil but supply disruptions and looming supply shortage from Iran is keeping uncertainty high,” said Hannes Loacker, an analyst at Raiffeisen Bank International AG (RBI) in Vienna who predicts U.S. futures will average $104 this year. “Without an intensifying Iran conflict, further price gains aren’t justified.”

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