Oil Declines as Rising U.S. Crude Stockpiles Expand Global Glut

Oil declined as rising U.S. crude stockpiles kept supplies at the highest level in more than eight decades.

Futures slid as much as 2 percent in New York after closing little changed Wednesday. Inventories expanded for a seventh week to 534.8 million barrels, according to a report from the Energy Information Administration. Imports and production dropped.

Oil is up about 12 percent in March after rebounding from a 12-year low last month amid speculation the global surplus will ease as U.S. output declines. Saudi Arabia, Russia, Qatar and Venezuela agreed in February they would cap production at January levels if other producers followed suit to tackle the oversupply. They’ll meet with other countries in Doha on April 17.

“Inventories continued to rise strongly, as expected,” said Ole Hansen, an analyst at Saxo Bank A/S in Copenhagen. “We saw a bigger-than-expected pick-up in refinery demand which should lead to a rising stockpile of gasoline. Rising supply of both crude and gasoline is not good news for a market where much of the rebalancing focus rests on the U.S.”

West Texas Intermediate for May delivery fell as much as 75 cents to $37.57 a barrel on the New York Mercantile Exchange and was at $37.88 as of 9:48 a.m. London time. The contract gained 4 cents to $38.32 Wednesday. Total volume traded Thursday was similar to the 100-day average. Prices are 1.9 percent higher this quarter.

U.S. Stockpiles

Brent for May settlement, which expires Thursday, dropped as much as 52 cents, or 1.3 percent, to $38.74 a barrel on the London-based ICE Futures Europe exchange. Prices have gained 8 percent this month and 4.2 percent this quarter. The more-actively traded June contract fell 20 cents to $39.85. The global benchmark crude is trading at a premium of $1.22 to WTI.

U.S. crude inventories increased by 2.3 million barrels last week, the EIA said in a report Wednesday. Supplies at Cushing, Oklahoma, the delivery point for WTI and the nation’s biggest oil-storage hub, dropped by 272,000 barrels. Production slid for a third week to 9.02 million barrels a day.

Production freeze and oil-market news:

” Ecuador and Venezuela would support a cut to output at the meeting between major exporters in Doha next month, Ecuador’s Oil Minister Carlos Pareja said in a post on the ministry’s Twitter account.

” Oman will attend the meeting, according to a person familiar with policy who asked not to be identified.

” China may pass the U.S. as the world’s largest crude importer in 2016, according to Unipec Vice President Fuliang Zhong.

” Eni SpA started pumping crude through a pipeline in Nigeria as production resumed following an act of sabotage on March 24, according to the company.

Source: Hellenic Shipping News World Wide