Oil traded below $62 a barrel after falling the most in almost three weeks as U.S. data showed inventories and supplies both surged, amplifying investors’ concerns of a global glut.
Futures in New York were little changed, after losing 3.6 percent in the previous two sessions. U.S. crude stockpiles rose to the highest level since December, exceeding analysts’ forecasts, while gasoline reserves expanded at four times the predicted rate. Meanwhile, a shale boom sent U.S. production to a record high in November.
Oil has erased most of the gains it had made since the start of the year as fears of swelling stockpiles bundled with record levels of production in the U.S. threatens efforts by the Organization of Petroleum Exporting Countries and its allies to curb a global oversupply. While an OPEC committee concluded last month that the oil market re-balance was quickening, the group’s head will meet with American shale company executives for dinner on Monday in Houston.
“Traders are hypersensitive to crucial inventories data, especially top-side builds given the market’s refocusing on shale output,” Stephen Innes, head of Asia-Pacific trading at Oanda Corp. in Singapore, said in an emailed note. The U.S. remaining “on course to be the world’s largest oil producer has prices convincingly moving lower.”
West Texas Intermediate for April delivery added 9 cents, or 0.2 percent, to trade at $61.73 a barrel on the New York Mercantile Exchange at 3:40 p.m. in Singapore. Prices slumped 2.2 percent on Wednesday for their biggest decline since Feb. 9. Total volume traded was about 46 percent above the 100-day average.
Brent for May settlement rose 17 cents to $64.90 on the London-based ICE Futures Europe Exchange. The contract fell 2.7 percent, or $1.79, on Wednesday. Front-month futures traded at a $3.32 premium to May WTI.
U.S. stockpiles of oil stored in tanks and terminals rose by 3.02 million barrels to about 423 million, the fourth increase in five weeks, according to the Energy Information Administration on Wednesday. That compares to a median estimate for a 3 million-barrel gain in an earlier Bloomberg survey. Gasoline inventories rose by 2.48 million barrels, versus an average estimate for an increase of 600,000 barrels.
As for production, U.S. output reached a record high in November, bypassing Saudi Arabia late last year to nip Russia, the world’s largest producer, at the heels. That’s helped boost American exports, with the combined shipments of crude, gasoline and distillates all expanding to total 7.3 million barrels a day in December, the largest volume ever in EIA data. — Bloomberg