“West Texas Intermediate oil dropped for a second day, extending the biggest decline in three months. U.S. crude stockpiles gained for the sixth week in seven, according to the American Petroleum Institute.
March futures fell 2.3 percent when they expired yesterday, the steepest drop since Nov. 20. U.S. crude inventories gained 2.96 million barrels last week to 372 million, the highest level since December, according to API data issued yesterday after futures settled. A government report today may show supplies rose 2 million barrels, according to a Bloomberg survey. TheFederal Reserve signaled it may consider slowing the pace of asset purchases, according to minutes of the Jan. 29-30 meeting.
“The much-needed correction has taken some steam off the overbought market,” said Andrey Kryuchenkov, a commodities analyst at VTB Capital in London, who forecast last week that oil prices would drop. “Short-term fundamentals simply do not justify sustained gains.”
WTI for April delivery slid as much as $1.67 to $93.55 a barrel in electronic trading on the New York Mercantile Exchange, the lowest since Jan. 16, and was at $93.87 at 11 a.m. London time. The March contract fell to $94.46 yesterday. The volume of all futures traded is 108 percent above the 100-day average.
Brent for April settlement tumbled as much as $1.48 to $114.12 a barrel on the London-based ICE Futures Europe exchange. Volume was more than 80 percent more than the 100-day average. The European benchmark grade was at a premium of $20.50 to WTI futures, compared with $20.38 yesterday. The gap expanded to $23.18 on Feb. 8, the widest since Nov. 26.
Fuel Stockpiles
Oil is extending losses in New York after breaching technical support yesterday, according to data compiled by Bloomberg. Futures settled below $95 a barrel, the trough between a “double-top” that formed after advances stalled near $98 on Jan. 31 and Feb. 13. The price gap is about $3, signaling crude may fall to around $92 in a so-called reversal. Losses tend to accelerate when chart support fails.
U.S. gasoline stockpiles slid by 122,000 barrels last week to 232.6 million barrels, API data show. The Energy Department is projected to show separately a decline of 900,000 barrels, according to the median estimate of 11 analysts in a Bloomberg News survey before its report is released today.
Crude supplies at Cushing, Oklahoma, the delivery point for futures traded on the New York Mercantile Exchange, increased 546,000 barrels to 50.8 million, according to the API….”
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