West Texas Intermediate fell for a third day after U.S. government data showed distillate and crude inventories increased in the world’s biggest oil consumer. Brent was steady in London.
Futures dropped as much as 0.6 percent in New York, extending a 1.8 percent loss on March 6, the most in two months. Distillate stockpiles, including heating oil and diesel, rose last week, the Energy Information Administration reported. Crude stockpiles gained for a seventh week while supplies at Cushing, Oklahoma, slid to the lowest level in two years with the opening of a new pipeline. “The market is reacting to the U.S. oil inventories,” Victor Shum, a vice president at IHS Energy Insight, a consultant in Singapore, said. “Crude had gone up quite a bit as a result of the situation in Ukraine earlier but right now, the market is adjusting. In the near term, some pullback is likely as long as we don’t see the Ukraine situation turning intense again.’ WTI for April delivery dropped as much as 59 cents to $100.86 a barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.88 to $101.45 on March 6th, the lowest settlement since Feb. 14. The volume of all futures traded was about 17 percent below the 100-day average. Brent for April settlement was up 16 cents at $107.92 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $6.82 to WTI. The spread ended March 6 session at $6.31, widening for the first time in seven days.
WTI has slid 1.5 percent this week, poised for the first decline in eight weeks, amid speculation tension is easing between Ukraine and Russia and as U.S. crude supplies climbed to the highest level since December. Distillate stockpiles increased by 1.41 million barrels in the seven days through Feb. 28, said the EIA, the Energy Department’s statistical arm. They were projected to decline by 1 million barrels, according to the median estimate of nine analysts surveyed by Bloomberg. Stockpiles at Cushing, the nation’s largest oil-storage center and the delivery point for New York-traded contracts, slid by 2.66 million barrels to 32.1 million, the EIA reported. TransCanada Corp. began moving crude from the hub to the Texas Gulf Coast in January via the southern portion of its Keystone XL pipeline.
« The drop in the price has been magnified amid growing U.S. inventories and decreasing geopolitical risks,” said Hong Sung Ki, a commodities analyst at Samsung Futures Inc. in Seoul. WTI is extending losses after breaching technical support. Futures on March 6 settled outside the lower boundary of an upward-sloping trend channel going back to mid-January. Investors typically sell contracts when chart support fails. The International Energy Agency said it’s “constantly monitoring” oil and gas markets amid the crisis in Ukraine and stands ready to respond if necessary. European Union leaders will consider repercussions for Russia at an emergency meeting today after Foreign Minister Sergei Lavrov fended off a U.S. effort to ease tensions in the Crimean peninsula.