By Gavin Evans and Yee Kai Pin (Bloomberg) – Crude oil fell for a sixth day, the longest decline in a month, on speculation supplies are more than sufficient to meet demand and as the dollar strengthened, reducing the investment appeal of commodities.

Oil traded below $78 a barrel after Qatar’s Energy Minister Abdullah bin Hamad al-Attiyah said yesterday the Organization of Petroleum Exporting Countries won’t change its output quotas because markets are well-stocked. The U.S. currency rose to a one-week high against the euro on concern over Greece’s struggle to contain its budget deficit.

“It looks like a little bit of a swing in sentiment,” said Mark Pervan, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. “The market’s been held up by some sentiment issues and some less-solid fundamental factors such as some of the economic data and some of the weather forecasts. The hard supply and demand numbers behind it really don’t hold up all that strongly.”

Crude oil for February delivery fell as much as 93 cents, or 1.2 percent, to $77.07 a barrel in electronic trading on the New York Mercantile Exchange. The contract, which expires Jan. 20, was at $77.57 a barrel at 12:23 p.m. in Singapore. The more widely traded March futures dropped 42 cents to $77.95 a barrel.

Prices dropped 5.7 percent last week, the first weekly decline in five, after U.S. crude oil and refined-product stockpiles rose and temperatures climbed.

The dollar reached $1.4335 against the euro, the highest since Jan. 8, from $1.4387 on Jan. 15 in New York. Finance ministers from the 16 nations that use the euro will gather today to discuss Greece’s public finances.

‘Real Fundamentals’

“People are coming back to real fundamentals, and really suggesting that perhaps we are awash with some commodities and we just don’t have economic performance to substantiate” higher prices, Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney, said in a Bloomberg Television interview. “We’re seeing adverse weather conditions ease, we’re seeing inventories once again build.”

U.S. distillate fuel stockpiles, including diesel and heating oil, increased in the week ended Jan. 8, ending a four- week drawdown, according to the Department of Energy. Crude oil and gasoline inventories climbed for a second week.

Temperatures in the U.S. northeast, which consumes four- fifths of the country’s heating oil, will probably be above average through Jan. 27, according to the National Weather Service.

Price Bets

Hedge-fund managers and other large speculators increased their bets on rising prices to the highest since at least 1983, according to U.S. Commodity Futures Trading Commission data.

Speculative net-long positions, or the difference between orders to buy and sell New York oil futures, rose for a fourth week, climbing 25 percent to 135,669 contracts in the week to Jan. 12, the Washington-based commission said Jan. 15.

Brent crude oil for March settlement fell as much as 72 cents, or 0.9 percent, to $76.39 a barrel on the London-based ICE Futures Europe exchange. The contract was at $76.72 a barrel at 12:23 p.m. Singapore time.

To contact the reporters on this story: Gavin Evans in Wellington at gavinevans@bloomberg.net; Yee Kai Pin in Singapore at kyee13@bloomberg.net

If you enjoyed this post then Subscribe to Savvy Investor via RSS