Bloomberg Oil Drops Below $86 a Barrel After Forecast U.S. Supply Gain

May 4 (Bloomberg) -- Crude oil traded below $86 a barrel in New York as analysts forecast that U.S. crude supplies increased, signaling fuel demand in the world’s biggest energy user may be slow to recover.

Oil declined for the first time in five days after analysts predicted an Energy Department report tomorrow may show U.S. crude supplies rose for the 13th time in 14 weeks as imports climbed. Inventories probably increased 1.7 million barrels in the seven days ended April 30 from 357.8 million the week before, according to the median of nine analyst estimates.

“I don’t think this is a fair value for crude at the moment given the fundamentals,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “Crude stocks are very high.”

Crude oil for June delivery dropped as much as 27 cents, or 0.3 percent, to $85.92 a barrel and was at $85.98 in electronic trading on the New York Mercantile Exchange at 9:33 a.m. Sydney time. Yesterday, the contract gained rose 4 cents to $86.19 on the New York Mercantile Exchange. more...